Sweden’s Volvo Cars mentioned Monday it might lower 3,000 jobs, principally white-collar jobs or round 15% of its office-based workforce, as a part of a $1.9 billion cost-cutting plan introduced final month amid powerful market circumstances.
The layoffs come because the Swedish automaker tries to resurrect its rock-bottom share value and drum up higher demand for its automobiles by restructuring a part of its business and chopping prices.
The carmaker, owned by Chinese group Geely, mentioned the cuts had been aimed “to build a stronger and even more resilient Volvo Cars at a time when the automotive industry is facing considerable challenges in its external environment.”
Of the three,000 jobs to be lower, round 1,200 had been in Sweden, in addition to 1,000 consultants based totally within the Nordic nation, Volvo Cars mentioned.
“The automotive industry is in the middle of a challenging period. To address this, we must improve our cash flow generation and structurally lower our costs,” the corporate’s chief govt, Hakan Samuelsson, mentioned in an announcement.
Samuelsson, who was just lately introduced again to the function after heading the corporate for a decade till 2022, unveiled a program in April to slash prices by 18 billion Swedish crowns ($1.9 billion), together with a considerable lower to its white-collar workers, who make up 40% of its workforce.
“It’s white collar in almost all areas, including R&D, communication, human resources,” Samuelsson informed Reuters on Friday, “So it’s everywhere, and it’s a considerable reduction.”
“I think it will be very healthy, and will save us money and give space for people to (take on) bigger responsibilities.”
Volvo Cars’ new CFO, Fredrik Hansson, informed Reuters that whereas all of its departments and places could be impacted, a lot of the redundancies will occur in Gothenburg.
Announcing the cost-cutting plan in April, he mentioned Volvo Cars needed to adapt to a “more regionalized world,” referring to the commerce conflict between China and the U.S.
The Swedish group is having to deal with larger tariffs on automobiles made exterior the United States, topic to a 25% tariff since early April.
With most of its manufacturing based mostly in Europe and China, Volvo Cars is extra uncovered to new U.S. tariffs than lots of its European rivals, and has mentioned it might turn out to be inconceivable to export its most reasonably priced automobiles to the U.S.
Volvo Cars introduced in early April that it might enhance its manufacturing within the United States and would most likely produce a further mannequin there.
It additionally inaugurated a brand new manufacturing line at its manufacturing facility in Ghent, Belgium, in late April, devoted to its small electrical SUV EX30.
The firm mentioned in a press launch that it might finalize a brand new structural setup by the autumn of this yr.
Handelsbanken analyst Hampus Engellau mentioned the variety of workers to be laid off was in step with expectations and that the corporate’s transfer to streamline its operations was optimistic.
As a results of the job cuts introduced Monday, Volvo Cars mentioned it anticipated to incur a one-time restructuring value of as much as 1.5 billion kronor ($158 million), booked on its second-quarter report.
At the tip of December 2024, the corporate had round 42,600 full-time workers.
Source: www.dailysabah.com