Mikael Sjoberg | Bloomberg | Getty Photos
Sweden-based automaker Volvo Vehicles on Monday mentioned it will minimize round 3,000 jobs as a part of a significant cost-cutting drive.
The transfer comes after the corporate, which is owned by China’s Geely Holding, introduced an 18 billion Swedish kronor ($1.89 billion) price and money motion plan late final month.
Volvo Vehicles mentioned the three,000 job cuts would primarily influence office-based positions in Sweden and signify round 15% of the agency’s whole office-based workforce.
“The actions introduced at the moment have been tough selections, however they’re necessary steps as we construct a stronger and much more resilient Volvo Vehicles,” Håkan Samuelsson, Volvo Vehicles president and CEO, mentioned in a press release.
“The automotive business is in the course of a difficult interval. To deal with this, we should enhance our money circulation era and structurally decrease our prices. On the similar time, we’ll proceed to make sure the event of the expertise we’d like for our bold future,” Samuelsson mentioned.
As a part of the redundancies, the corporate mentioned it will scale back round 1,000 positions presently held by consultants, principally in Sweden, roughly 1,200 staff in Sweden and the remaining in different world markets.
When the motion plan was launched on April 29, Volvo Vehicles mentioned this system would come with reductions in investments and redundancies at its operations throughout the globe. The corporate additionally withdrew its monetary steering for each 2025 and 2026, citing tariff strain on the automotive sector.
Commerce conflict dangers
Uncertainty over commerce tariffs is predicted to have a profound influence on the automotive business, significantly given the excessive globalization of provide chains and the heavy reliance on manufacturing operations throughout North America.
U.S. President Donald Trump on Friday threatened to impose 50% tariffs on imports from the European Union from the beginning of June, prompting Europe’s auto index to fall sharply.
The U.S. president has since watered down the menace, saying on Sunday that he had agreed to push the rollout of the punitive import duties again to July 9, following a name with EU Fee President Ursula von der Leyen.
The EU already faces 25% U.S. import tariffs on autos, metal and aluminum and so-called “reciprocal” tariffs of 10% for many different items.
Volvo Vehicles mentioned the measures have been vital to make sure it could ship on its long-term technique, including that it stays agency on its ambition to grow to be a completely electrical automotive firm.
A frontrunner within the electrical car (EV) transition, Volvo Vehicles introduced plans in September to drop its near-term purpose of promoting solely EVs, citing a have to be “pragmatic and versatile” amid altering market circumstances and cooling demand.
