[STOCKHOLM] Volvo Cars will cut 3,000 mostly white-collar jobs as part of a restructuring announced last month as it grapples with high costs, a slowdown in electric vehicle demand and trade uncertainty, it said on Monday (May 26).
The layoffs come as the Swedish automaker tries to resurrect its rock-bottom share price and drum up better demand for its cars by restructuring part of its business and cutting costs.
CEO Hakan Samuelsson, who was recently brought back to the role after heading the company for a decade until 2022, unveiled a programme in April to slash costs by 18 billion Swedish kronor (S$2.4 billion), including a substantial cut to its white-collar staff, who make up 40 per cent of its workforce.
“It’s white collar in almost all areas, including R&D, communication, human resources,” Samuelsson told 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 told Reuters that while all of its departments and locations would be impacted, most of the redundancies will happen in Gothenburg.
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“It’s tailored to make us structurally more efficient, and then how that plays out might vary a bit depending on the area. But no stone is left unturned,” Hansson said.
The layoffs represent around 15 per cent of the company’s office staff, Volvo Cars said in a statement, and would incur a one-time restructuring cost of 1.5 billion kronor.
With most of its production based in Europe and China, Volvo Cars is more exposed to new US tariffs than many of its European rivals, and has said it could become impossible to export its most affordable cars to the US.
The company said in a press release that it would finalise a new structural set-up by the autumn of this year.
Handelsbanken analyst Hampus Engellau said the number of staff to be laid off was in line with expectations, and that the company’s move to streamline its operations was positive.
The group withdrew its financial guidance as it announced its cost cuts last month, pointing to unpredictable markets amid weaker consumer confidence and trade tariffs causing turmoil in the global auto industry.
On Friday, US President Donald Trump threatened to impose a 50 per cent tariff on imports from the European Union from Jun 1, but on Monday he backed away from that date, restoring a Jul 9 deadline to allow for talks between Washington and Brussels.
Volvo Cars’ shares were up 3.6 per cent by 1339 GMT on Monday, with most of the rise coming before the layoff announcement. They are still down 24 per cent year-to-date. REUTERS
