Sweden’s Volvo Cars said Monday it would cut 3,000 jobs, or around 15 percent of its office-based workforce, as part of a $1.9 billion cost-cutting plan announced last month amid tough market conditions.
The carmaker, owned by Chinese group Geely, said the cuts aimed “to build a stronger and even more resilient Volvo Cars at a time when the automotive industry is facing considerable challenges in its external environment”.
Of the 3,000 jobs to be cut, around 1,200 were in Sweden, as well as 1,000 consultants primarily based in the Nordic country, Volvo Cars said.
“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,” the company’s chief executive Hakan Samuelsson said in a statement.
Announcing the cost-cutting plan in April, he said Volvo Cars had to adapt to a “more regionalised world”, referring to the trade war between China and the United States.
The Swedish group is having to cope with higher tariffs on cars made outside the United States, subjected to a 25-percent tariff since early April.
Volvo Cars announced in early April that it would increase its production in the United States and probably produce an additional model there.
It also inaugurated a new production line at its factory in Ghent, Belgium in late April, dedicated to its small electric SUV EX30.
As a result of the job cuts announced Monday, Volvo Cars said it expected to incur a one-time restructuring cost of up to 1.5 billion kronor ($158 million), booked on its second-quarter report.
At the end of December 2024, Volvo Cars had around 42,600 full-time employees.
This story was originally featured on Fortune.com
