Volvo Cars announced that it will cut down around 3,000 jobs as a part of a restructure due to the high costs and low demand for electric vehicles. With the uncertainty of the US tariffs, it could only get from bad to worse for the Sweden-based automobile manufacturer. Last month, the company announced that it is forced to take a restructuring path so that it can save around $1.89 billion and also pull the plug on future investment plans. Volvo Cars is owned by China’s Geely Holding.
Volvo Cars cost and cash action plan: What does this mean?
Volvo has announced that these reductions will primarily affect office-based positions in Sweden and will represent around 15% of the total office-based workforce globally.
The estimated reduction in the Swedish operations (Volvo Personvagnar AB) concerns around 1,200 employee-held positions. Volvo Cars has initiated negotiations with relevant labour unions and will issue a notice for these office-based positions to the Swedish labour market authorities(the Swedish Arbetsförmedlingen).
As part of the approximately 3,000 redundancies, the company will reduce around 1,000 positions currently filled by consultants (most in Sweden), and as mentioned 1,200 employees in Sweden and the remaining in other global markets.
The specific number of job reductions across all regions will be determined over the coming period, once the company has finalised a review of its entire organisation and determined a new structural set-up. Volvo Cars has a goal to complete the structural changes during the autumn of 2025.
“The actions announced today have been difficult decisions, but they are important steps as we build a stronger and even more resilient Volvo Cars,” said Håkan Samuelsson, Volvo Cars President and CEO. “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. At the same time, we will continue to ensure the development of the talent we need for our ambitious future.”