Volvo Cars' Novo Energy to cut 50% of workforce amid restructuring
Volvo Cars' battery venture Novo Energy has announced a workforce reduction and organisational changes, cutting 50% of its employees.
This decision follows the bankruptcy of its technology partner, Northvolt, due to financial and operational challenges.
The workforce reduction aims to optimise operations and manage costs, with all redundancy notices subject to ongoing union negotiations in Sweden.
NOVO Energy chief executive officer Adrian Clarke said: 'Despite our best efforts to secure our business and an extensive ongoing search for a suitable new technology partner, the current economic challenges and market conditions have made it impossible to maintain our operations at the current scale.
"This was an incredibly hard decision to make, and it was not made lightly.'
Established in 2021 by Northvolt and Volvo Cars, Novo Energy is aimed to build a dedicated battery factory in Gothenburg, Sweden.
The company will maintain limited operations while completing the first construction phase and exploring potential future scenarios.
In January, the joint venture-initiated cost-cutting measures, including a 30% staff reduction.
The recent layoffs will eliminate an additional 150 jobs, according to a Novo spokesperson, reported by Reuters.
A Volvo Cars spokesperson confirmed their shared objective for Novo but withheld further details.
Also, in January, Northvolt came to a decision to divest its ownership in Novo Energy, transferring its shares to Volvo Cars.
Concurrently, the companies are assessing opportunities for joint endeavours in the North American market.
Amid financial restructuring, Northvolt, which is under US bankruptcy protection, has ceased financial contributions to several of its collaborative projects, including Novo Energy, throughout 2024 to focus on its primary operation of manufacturing battery cells.
"Volvo Cars' Novo Energy to cut 50% of workforce amid restructuring" was originally created and published by Just Auto, a GlobalData owned brand.
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