Volvo Cutting 3,000 Jobs to Build a More ‘Resilient’ Company
As part of a large cost-cutting initiative, Volvo is slashing jobs.
Automaker Volvo Cars is slashing about 3,000 jobs as it attempts to reduce costs. The workforce cutback impacts office positions in the company’s home country of Sweden and affects roughly 15% of the total office-based staff.
To create a more efficient and “resilient Volvo Cars,” some “difficult decisions” had to be made, according to company leadership. The turnaround strategy, which was first announced in April, involves reducing operational redundancies and a pullback in investments.
“The automotive industry is in the middle of a challenging period,” said Volvo Cars CEO Håkan Samuelsson, per CNBC. “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.”
After significant losses, falling sales, and other setbacks, Volvo’s Samuelsson implemented a clear directive to get the company back on track. The cost-cutting plan is to lower costs by $1.9 billion (18 billion kronor).
Volvo Cars is owned by Chinese company Geely. It has about 42,600 full-time employees and has manufacturing facilities in Belgium, China, and South Carolina.
Geely is Not Forcing Volvo’s Job Cuts
In an interview with Bloomberg, Samuelsson explained Volvo’s layoffs aren’t related to any direct actions Geely is taking. The CEO tempered speculation that the Chinese owner wants more control.
“People worry Geely will centralize R&D in China. That’s a misunderstanding,” Samuelsson said last week. “There’s no such plan, and Chinese operations are also cutting costs.”
It makes sense to keep R&D mostly outside China, according to Samuelsson. With restrictions and limitations imposed by the U.S. and other nations, some hardware and software must be developed elsewhere. For instance, Volvo’s fully electric EX30 model, which is popular in Europe, needs modifications to meet U.S. regulations, which Geely cannot do.
In summer 2024, Volvo announced it was shifting production of EVs from China to Belgium. Specifically, manufacturing of the EX30 and EX90 models were moved to Belgium production plants.
Volvo’s layoffs will affect about 1,000 consultant positions as well as office staff in Sweden. The remainder of the cuts will be in other markets.
