Volvo to slash 15% of its workforce thanks to low EV demand
Volvo will cut 3,000 jobs as it battles against the slowdown of electric vehicle sales across the globe.
The Swedish car giant revealed this morning 15 per cent of its office workforce will be impacted, with the majority of those hitting white-collar jobs in the Scandinavian country.
It forms part of a £1.4bn cost-saving strategy Volvo announced earlier this month in order to 'offset external headwinds' caused by the decline in EV sales, high costs and global trade uncertainty.
Calling Monday's actions 'difficult decisions' made to 'build a stronger and more resilient Volvo,' Hakan Samuelsson, chief executive, 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. At the same time, we will continue to ensure the development of the talent we need for our ambitious future.'
Owned by China's Geely Holding Group with production in both China and Europe, Volvo has been highly exposed to the 25 per cent tariffs introduced in the US by President Trump on imported cars.
Volvo confirmed its annual electric car sales plummet 11 per cent in April, with sales of its electrified models – fully electric and plug-in hybrids – falling 16 per cent compared to the same period last year.
Volvo has its main headquarters and product development offices in Gothenburg, Sweden, and makes cars and SUVs in Belgium, South Carolina and China.
As of 2024 Volvo employs roughly 44,000 employees globally, whith nearly 20,000 are 'white-collar' workers.
Telling Reuters that cuts are 'everywhere' and 'considerable' Samuelsson confirmed: 'It's white-collar in almost all areas, including R&D, communication, human resources.
'I think it will be very healthy, and will save us money and give space for people to (take on) bigger responsibilities.'
Samuelsson was reappointed as chief executive on 30 March after the end of Scotsman Jim Rowan's three-year tenure following a rocky period of EV sales.
Volvo is one of the car makers to have invested most in the EV transition, as it was one of the first to offer an electrified version of every model in its range.
In 2021, Volvo said all of its cars would go electric by 2030, before U-turning on that last year after admitting it needed to scale back the ambitious deadline due to a number of issues including 'additional uncertainties created by recent tariffs on EVs in various markets'.
In its latest sales report from April, Volvo confirmed that its share of fully electric cars constituted 20 per cent of all cars sold for the month while the share of plug-in hybrid models accounted for 25 per cent.
Fully electric sales were down 32 per cent from April 2024.
While poor EV uptake has hit Volvo just like many other manufacturers, Samuelsson said it could become impossible to import the smallest cars in the company's line-up to the US due to the new tariffs.
On Friday Donald Trump said he was recommending a straight 50 per cent tariff on goods from the European Union starting June 1, saying the EU has been hard to deal with on trade.
Samuelsson told Reuters a 50 per cent tariff would limit the ability of Volvo to sell its Belgium-made EX30 electric vehicle in the US and customers would have to pay a large part of the tariff-related cost increases.
But despite the threats of rising tariffs, Samuelsson said he was hopeful Europe and the US will soon come to an agreement.
'I believe there will be a deal soon. It could not be in the interest of Europe or the U.S. to shut down trade between them,' Samuelsson commented.
This is Money has contacted Volvo UK for comment.
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