Volvo Vehicles will reduce 3,000 principally white-collar jobs as a part of a restructuring introduced final month because it grapples with excessive prices, a slowdown in electrical car demand and commerce uncertainty, it mentioned on Monday.
The layoffs come because the Swedish automaker tries to resurrect its rock-bottom share value and drum up higher demand for its vehicles by restructuring a part of its enterprise and slicing prices.
CEO Hakan Samuelsson, who was just lately introduced again to the position 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 reduce to its white-collar employees, who make up 40% of its workforce.
“It’s white collar in almost all areas, including R&D, communication, human resources,” Samuelsson advised 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 Vehicles’ new CFO, Fredrik Hansson, advised Reuters that whereas all of its departments and areas could be impacted, a lot of the redundancies will occur in Gothenburg.
“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 mentioned.
The layoffs symbolize round 15% of the corporate’s workplace employees, Volvo Vehicles mentioned in an announcement, and would incur a one-time restructuring price of 1.5 billion crowns.
With most of its manufacturing primarily based in Europe and China, Volvo Vehicles is extra uncovered to new US tariffs than a lot of its European rivals, and has mentioned it may change into unimaginable to export its most inexpensive vehicles to the US.
The corporate mentioned in a press launch that it could finalize a brand new structural set-up by the autumn of this 12 months.
Handelsbanken analyst Hampus Engellau mentioned the variety of employees to be laid off was in step with expectations, and that the corporate’s transfer to streamline its operations was constructive.
The group withdrew its monetary steering because it introduced its price cuts final month, pointing to unpredictable markets amid weaker client confidence and commerce tariffs inflicting turmoil within the international auto trade.
On Friday, President Trump threatened to impose a 50% tariff on imports from the European Union from June 1, however on Monday he backed away from that date, restoring a July 9 deadline to permit for talks between Washington and Brussels.
