Volvo (VLVLY) Plans to Cut 3,000 Jobs
Automaker Volvo (VLVLY) is cutting 3,000 mostly white-collar jobs in order to lower costs and respond to slowing electric vehicle demand, rising expenses, and trade uncertainty. The move is part of a broader restructuring plan that was announced last month. CEO Hakan Samuelsson, who recently returned to lead the company, launched a program in April to cut 18 billion Swedish crowns, or $1.9 billion, in costs. This includes major reductions in office staff, which make up 40% of Volvo's workforce.
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The job cuts will impact nearly all departments, such as R&D, communications, and HR, with most layoffs happening at Volvo's Gothenburg headquarters. CFO Fredrik Hansson explained that while every area will be affected, the goal is to make the company more efficient. Volvo said that this restructuring will affect about 15% of its office employees and result in a one-time cost of 1.5 billion crowns. Nevertheless, the company aims to have the new structure finalized by this fall.
It is worth noting that Volvo is also facing pressure from global trade issues. Since much of its production is in Europe and China, it is more exposed to U.S. tariffs than some competitors. As a result, the company warned that it may not be able to export its more affordable cars to the U.S. if new tariffs are imposed. In addition, Volvo recently pulled its financial guidance due to weak consumer confidence and shifting trade policies. While President Trump threatened 50% tariffs on EU imports starting June 1, he later delayed the decision to July 9 in order to allow for more talks.
Is VLVLY Stock a Good Buy?
Using TipRanks' technical analysis tool, the indicators seem to point to a neutral outlook. Indeed, the summary section pictured below shows that nine indicators are Bullish, compared to five Neutral and eight Bearish indicators.
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