Chinese-owned Volvo announces 3,000 job cuts
Sweden-based Volvo Cars will cut 3,000 jobs as part of a restructuring plan, announced at a time when the automotive industry faces mounting challenges from sudden trade tensions and economic uncertainty.
The layoffs represent around 15 per cent of the Chinese company's office staff, with close to three-quarters of the white collar job losses expected to occur in Sweden and the rest in the company's global operations.
Volvo Cars has its main headquarters and product development offices in Gothenburg, Sweden, and makes cars and SUVs in Belgium, South Carolina and China.
"The actions announced today have been difficult decisions, but they are important steps as we build a stronger and even more resilient Volvo Cars," said Hakan Samuelsson, Volvo Cars president and chief executive.
"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 said Monday that around 1,200 of the job reductions would come among workers in Sweden, with another 1,000 positions currently filled by consultants, mostly in Sweden, also slated for elimination. The rest of the job losses would be in other global markets.
With most of its production based in Europe and China, Volvo Cars is more exposed to Donald Trump 's tariffs than many of its European rivals, and has said it could become impossible to export its most affordable cars to the US.
The group, majority-owned by China's Geely Holding, announced in April its programme to slash costs by SEK18bn (£1.39bn) and hit the brakes on investments. Volvo Cars was sold by American motor industry giant Ford to Geely in 2010 for £1.2bn.
Volvo Cars said its global sales for April fell by 11 per cent compared to the same period last year.
In the first quarter, the auto maker had 43,500 full-time employees and 3,000 staffing agency personnel, according to its earnings report. White-collar staff make up more than 40 per cent of its workforce.
Carmakers around the world are facing several headwinds, among them higher costs for raw materials and a diminishing European car market amid President Trump's imposition of 25 per cent tariffs on imported cars and steel.
Last week, Mr Trump threatened to impose a 50 per cent tariff on imports from the EU from 1 June but later backed away from that date, restoring a July deadline to allow for talks between Washington and Brussels.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
an hour ago
- Reuters
Fed's Musalem estimates ‘50-50' chances on tariffs triggering prolonged US inflation, FT reports
June 6 (Reuters) - St. Louis Federal Reserve President Alberto Musalem has put the likelihood of Donald Trump's trade war causing a prolonged surge in inflation at "50-50," warning that U.S. policymakers would face uncertainty "right through the summer," the Financial Times reported on Friday. Musalem told the newspaper that while U.S. President Trump's tariffs could boost inflation for "a quarter or two," there was "an equally likely scenario where the impact of tariffs on prices could last longer." Trump's tariff hikes and a $2.4 trillion budget bill have shaken markets, prompting a wait-and-see stance from the Fed after last year's rate cuts. Musalem said he believes officials could benefit from a favorable scenario where uncertainty over trade and fiscal policy "goes away in July," which would put the Fed back on track to cut interest rates in September, according to the FT. He also highlighted, however, the possibility of a scenario "where inflation begins to rise materially and we will not know whether that is a temporary, one-off increase in the price level or whether it has more persistence," the report said. The Fed is expected to hold rates steady at its mid-June meeting, when it will release updated economic projections.
BBC News
an hour ago
- BBC News
India leads in remittances - but Trump's tax could deal a blow
A study by Center for Global Development, a Washington-based think tank, suggests the proposed tax could sharply cut formal transfers, with Mexico facing the biggest hit - over $2.6bn annually. Other major losers include India, China, Vietnam and several Latin American nations like Guatemala, the Dominican Republic and El Salvador. To be sure, there's still some confusion surrounding the tax, and final approval is pending Senate action and the President's signature. "The tax applies to all non-citizens and even embassy and UN/World Bank staff. But those who pay taxes can claim a tax credit. Thus, the remittance tax would apply only to those migrants who do not pay taxes. That would mostly include unauthorised migrants (and diplomats)," Dilip Ratha, the World Bank lead economist for migration and remittances, told the BBC. Dr Ratha wrote in a note on LinkedIn that migrants would try to cut remittance costs by turning to informal methods - hand-carrying cash, sending money through friends, couriers, bus drivers or airline staff, arranging local currency payouts via friends in the US, or using hawala, hundi and cryptocurrencies. "Will the proposed tax deter unauthorised immigration to the US? Will it encourage unauthorised migrants to return home?" wonders Dr Ratha. Not quite, he says. A minimum wage job in the US earns over $24,000 a year - roughly four to 30 times more than in many developing countries. Migrants typically send home between $1,800 and $48,000 annually, estimates Dr Ratha. "A 3.5% tax is unlikely to deter these remittances. After all the main motivation for migration - migrants trying to cross oceans and rivers and mountains - is to send money home to help helpless family members."
Reuters
an hour ago
- Reuters
Japan trade negotiator Akazawa says he made progress in US tariff talks
TOKYO, June 7 (Reuters) - Japan had made some progress in a fifth round of trade talks with U.S. officials aimed at ending tariffs that are hurting Japan's economy, Tokyo's chief tariff negotiator said. "Tariffs have already been imposed on autos, auto parts, steel and aluminum, and some of them have doubled to 50% along with 10% general tariff. These are causing daily losses to Japan's economy," Ryosei Akazawa, said in Washington on Friday after talks with officials, including Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick. Akazawa declined to say what progress they had made. The latest round of talks may be the last in-person meeting between senior Japanese and U.S. officials before the Group of Seven (G7) leaders summit that starts on June 15, where U.S. President Donald Trump is expected to meet Japanese Prime Minister Shigeru Ishiba. Japan also faces a 24% tariff rate starting in July unless it can negotiate a deal with Washington. "We want an agreement as soon as possible. The G7 summit is on our radar, and if our leaders meet, we want to show what progress has been made," Akazawa said. "Still we must balance urgency with a need to guard our national interests," he added. Last month Japan's trade negotiator said U.S. defence equipment purchases, shipbuilding technology collaboration, a revision of automobile import standards and an increase in agricultural imports could be bargaining chips in tariff talks. In a bid to reach an agreement with the U.S., Japan is also proposing a mechanism to reduce the auto tariff rate based on how much countries contribute to the U.S. auto industry, the Asahi newspaper reported on Friday. Akazawa said Japan's position has not changed and that the tariffs are not acceptable.
