After denying a claim in the Financial Times Deutschland that it would axe 20% of its workforce, Saab on Wednesday confirmed the cuts.

According to Reuters, the General Motors unit said that it planned to cut 20% of its workforce, or about 1,300 jobs, in an overhaul aimed at improving the Swedish car maker's financial situation from 2003.

Saab said the the job cuts, mainly in Sweden, would be accompanied by a streamlining of its engineering organisation and cooperation on cost cuts with other GM units in a bid to improve efficiency in all areas of the business, Reuters reported.

"The aggressive efficiency programme presented today aims at enabling the company to substantially improve the financial situation beginning in 2003," said Saab in a statement, according to Reuters.

It did not say when it expected to return to profit, and a GM Europe spokesman declined to elaborate to Reuters on the statement.

According to Reuters, Saab, whose brand has deteriorated from the desirable status it enjoyed among young urban professionals in the late 1980s, has lost money in 10 of the last 12 years and last reported profits in 1994 and 1995 following the launch of the 900 car. Analysts believe Saab may post an operating loss of about 500 million euros this year.

Reuters said Saab has already cut its unit sales target for this year to 125,000-130,000 from a previous goal of 140,000 and aims to sell around 200,000 vehicles per year by about 2005.

"In view of the aggressive action plan to improve Saab's efficiency and to increase its volume and revenue base, we are confident that the company is now on the right track," said GM Europe president Michael Burns in a statement, Reuters reported.

According to Reuters, the measures, which Saab hopes will improve productivity by 20% in manufacturing, include 800 job cuts in production, 450 in the engineering organisation and 50 in sales and marketing.

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