Mikael Sjoberg | Bloomberg | Getty Pictures
Sweden-based automaker Volvo Vehicles on Monday stated it might reduce 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) value and money motion plan late final month.
Volvo Vehicles stated the three,000 job cuts would primarily affect office-based positions in Sweden and symbolize round 15% of the agency’s whole office-based workforce.
“The actions introduced at the moment have been tough selections, however they’re vital steps as we construct a stronger and much more resilient Volvo Vehicles,” Håkan Samuelsson, Volvo Vehicles president and CEO, stated in an announcement.
“The automotive trade is in the midst of a difficult interval. To handle this, we should enhance our money move era and structurally decrease our prices. On the identical time, we’ll proceed to make sure the event of the expertise we’d like for our bold future,” Samuelsson stated.
As a part of the redundancies, the corporate stated it might cut back round 1,000 positions at the moment held by consultants, largely 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 stated this system would come with reductions in investments and redundancies at its operations throughout the globe. The corporate additionally withdrew its monetary steerage for each 2025 and 2026, citing tariff stress on the automotive sector.
Commerce battle dangers
Uncertainty over commerce tariffs is anticipated to have a profound affect on the automobile trade, notably 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 risk, 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 stated the measures have been obligatory to make sure it might probably ship on its long-term technique, including that it stays agency on its ambition to grow to be a completely electrical automobile firm.
A frontrunner within the electrical automobile (EV) transition, Volvo Vehicles introduced plans in September to drop its near-term purpose of promoting solely EVs, citing a must be “pragmatic and versatile” amid altering market situations and cooling demand.