Volvo slashes 3,000 jobs amid industry turmoil and mounting global uncertainty
STOCKHOLM: Volvo Cars is slashing 3,000 white-collar jobs in a comprehensive reorganization effort aimed at cutting costs and resuscitating its stressed share price, the Swedish automaker announced on Monday, according to a recent Reuters report.
Confronted with escalating business expenditures, lukewarm demand for electric vehicles, and imminent trade uncertainties, particularly in the United States, Volvo states that the job cuts are part of a broader strategy to modernize its international operations.
The firm, renowned for its Scandinavian design and safety-first manufacturing, aims to save 18 billion Swedish crowns (approximately S$1.9 billion). CEO Hakan Samuelsson, who had been absent for two years and is now back at the helm, first announced the cost-cutting policy in April.
'This is a significant reduction across almost all white-collar departments—R&D, communications, HR—you name it,' Samuelsson said. 'It will be healthy for the company in the long run. It gives people the opportunity to take on broader responsibilities.'
The dismissals will touch approximately 15% of Volvo's office-based personnel and will sustain a one-time reorganization cost of 1.5 billion crowns. While all divisions and international sites will be affected, CFO Fredrik Hansson noted that Gothenburg, the car manufacturer's headquarters and control center, will experience the largest number of job cuts.
'We're looking at structural efficiency across the board. No stone is left unturned,' Hansson said.
Volvo's problems are intensified by its exposure to global trade pressures, mainly the tariffs that the U.S. will impose, where the firm worries that it may no longer be able to viably distribute its lower-cost models. With many of its manufacturing positioned in Europe and China, Volvo could be hit harder than some of its European counterparts if trade barricades escalate.
The firm aims to conclude a new business structure by autumn.
Notwithstanding Monday's ugly update, Volvo shares increased 3.6% by early afternoon GMT, although predictors noted that most of the increase came earlier than the downsizing statement.
Handelsbanken expert Hampus Engellau said the scale of the reductions met market outlooks and indicated a positive move to future-proof the business.
Volvo just extracted its financial direction amid explosive market environments, citing weaker buyer confidence and erratic tariff moves. Last week, U.S. President Donald Trump warned that impose a 50% tariff on EU car imports beginning Jun 1, before deferring the time limit to Jul 9 to permit additional consultations with Brussels.
As worldwide burdens intensify, Volvo's management is confident that lean operations structure and a closer focus on efficiency will direct the car manufacturer through tempestuous times.
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