Volvo Cars Lay off 1.3k Workers in Sweden as Part of a Cost-Saving Plan

Layoffs 2023: On Thursday, Volvo Cars, a Swedish multinational luxury vehicle manufacturer with headquarters in Torslanda, Gothenburg, announced that it would be letting go of about 1,300 workers as part of a cost- and resource-saving initiative.

'Volvo Cars plans to additionally accelerate its constant transformation, with an increased priority on its cost optimization and resource efficiency ambition,' the Nasdaq Stockholm stated in a report on May 4 (Thursday).

The business added that it had set forth specific strategic goals for the future, including accelerating growth and going entirely electric by 2030 while continuing to reduce its overall CO2 footprint significantly.

The next step in securing a more effective and sustainable cost base for the future will be taken by the company to ensure that it carries out those ambitions.

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1,300 job losses at Volvo Cars

The business also stated that it expects to scale back its operations in Sweden by about 1,300 office-based employee positions.

Volvo Cars announced that its primary global operating unit (Volvo Personvagnar AB), where it has also engaged in contract negotiations with the unions, will be cutting about 1,100 positions for employees. Volvo Cars have also given notice to the Swedish government (the Swedish Arbetsförmedlingen) regarding these office-based positions.

A review of all of our legal entities in Sweden will be conducted after which the remaining 200 positions will be determined. According to the statement, the jobs lost account for about 6% of all employees in Sweden.

In the upcoming months, the company will also drive efficiency improvements across all of its international operations. According to Volvo Cars, it will also examine and cut back on the number of consultants and purchased services.

Over the next term, the exact type and the confirmed number of job deductions will be chosen after the ideal structural set-up has been specified and a review of all commodities has been completed. It was also stated that the reductions would follow any applicable local regulations.

However, the company's manufacturing operations' production line jobs won't be impacted for the time being.

Layoffs at Volvo Cars: What did CEO Jim Rowan say?

Jim Rowan, CEO of Volvo Cars, stated, "The cost actions we started last year are beginning to pay off in some critical areas, like material costs. We obviously need to take further action, though. Our industry will probably face challenges from the economy, rising raw material costs, and increased competition for some time.

In terms of electrification, software, and core computing technologies, as well as direct customer engagement, the industry is also changing quickly, according to Jim Rowan.

Thanks to the first mover benefit, we are moving ahead with our plan to only use electric vehicles. We will keep making investments in the people, equipment, and technologies required to help create safe and long-lasting mobility for our clients. We can achieve this by implementing structural change and fostering greater efficiency throughout the entire business," said Rowan.

The increased cost and efficiency actions are intended to position Volvo Cars as it keeps effectively achieving its ambitious transformation goals given the likely long-term nature of the headwinds the automotive industry is currently facing.

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About Volvo automobiles

With sales to customers in more than 100 countries, Volvo Cars, which was founded in 1927, is one of the most well-known and reputable automakers in the world, according to the company's statement.

The Volvo Car Group reported an operating profit of SEK 22.3 billion for the entire year 2022. In 2022, revenue totaled SEK 330.1 billion, with 615,121 cars sold worldwide.

Volvo Cars had about 43,200 employees who were full-time as of December 2022. Sweden's Gothenburg serves as the primary location for Volvo Cars' headquarters, product development, marketing, and administrative operations. In addition to Chengdu, Daqing, and Taizhou in China, the exhibition facilities for the Volvo Cars stand are located in Gothenburg, Ghent, South Carolina. According to the statement, the company also maintains R&D and design facilities in Gothenburg, Camarillo, and Shanghai.