The world's two leading home appliance makers are cutting costs -- from jobs to factories -- as they face weaker demand in major markets from Europe to the United States, with recession-wary shoppers putting off big-ticket buys such as washing machines and refrigerators.

Whirlpool, which makes Maytag and KitchenAid appliances, is axing more than 5,000 jobs -- a tenth of its workforce in North America and Europe -- closing a plant in Arkansas, moving another from Germany to Poland and reducing overall manufacturing capacity by about 6 million units.

Its main rival AB Electrolux said it would detail its cost-cutting measures by the middle of next month.

Both reported weaker quarterly profits and cut their full-year forecasts, warning that demand in North America and Europe will be weaker than previously estimated.

Given the weaker demand environment in the U.S. and western Europe, we adjust capacity and our overhead costs, Electrolux Chief Executive Keith McLoughlin told Reuters.

Both companies have been cutting costs and shifting business to emerging markets, but Whirlpool now expects growth in Asia and Latin America to slow, too.

Our results were negatively impacted by recessionary demand levels in developed countries, a slowdown in emerging markets and high levels of inflation in material costs, Whirlpool Chief Executive Jeff Fettig said in a statement.

Shares in Whirlpool, already down by more than a third this year, slumped 12 percent on the New York Stock Exchange.

(Whirlpool's cost) rationalization in North America and Europe alleviates some concerns on cost. However, it signals low confidence in a quick return to normal appliance demand in developed markets, Goldman Sachs said in a client note.

Electrolux shares, also down by around a third since January, gained 7 percent in Stockholm, amid some investor relief that the drop in quarterly earnings was not as bad as expected.


Whirlpool's July-September adjusted profit was $2.35 a share, below the average analyst forecast for $2.68 a share, according to Thomson Reuters I/B/E/S.

It now expects full-year profit of $4.75-$5.25 per share, down from its previous estimate at the low-end of $7.25-$8.25 a share.

The company will take a restructuring charge of about $500 million from the next quarter through 2013 related to the cost-cutting moves, which will remove $400 million from annual costs by end-2013.

Two years ago, Whirlpool closed its manufacturing facility in Evansville, Indiana, with the loss of about 1,100 jobs.

Electrolux, whose brands also include Frigidaire and AEG, reported third-quarter adjusted operating profit of 1.10 billion Swedish crowns ($173 million) versus a 1.06 billion crown mean forecast in a Reuters poll and 1.98 billion crowns a year ago.

Sales dipped to 25.7 billion crowns from 26.3 billion crowns in the same 2010 period. (Reporting by Mihir Dalal in Bangalore and Helena Soderpalm, Johannes Hellstrom and Patrick Lannin in Stockholm, Editing by Ian Geoghegan)