Volvo Cars plans to slash around 3,000 jobs as part of its cost-cutting and financial restructuring initiative, aiming for a leaner operation.
Volvo Cars, the Swedish automobile manufacturer, has announced a series of changes aimed at transitioning its entire fleet to battery electric vehicles (BEVs) by 2030. The company is also implementing a cost and cash action plan to reduce its yearly cost base by $1.8bn, resulting in the elimination of approximately 3,000 positions within the company.
The company's president and CEO, Håkan Samuelsson, described the workforce reductions as "difficult decisions" necessary to make Volvo stronger and more resilient in the face of the challenging period and shifting landscape of the automotive industry.
Volvo is conducting an organization-wide strategic review to decide on further restructuring action. As part of this review, 1,000 consultant positions will be lost, with the majority being in Sweden. Additionally, 1,200 positions at Volvo Personvagnar AB, the Swedish branch of Volvo, will be made redundant.
Despite the cost-cutting measures, Volvo is committed to the EV market, as it is the fastest growing segment. The company aims to have 50% of the vehicles it sells be BEVs by 2025, and 100% by 2030. To facilitate this transition, Volvo is focusing on integrating the EV transition throughout the value chain.
Volvo is contracting European companies directly in its EV supply chain primarily for the transition to electric drive through partnerships focused on advanced manufacturing technologies like Megacasting to reduce parts complexity. The company is also collaborating with European partners on electric axle development, though specific company names in Europe are not explicitly listed in the search results.
Kerstin Enochsson, former head of procurement and supply chain at Volvo Cars, commented that the company's EV trajectory is super positive. She mentioned the introduction of direct contracts with upstream players to facilitate the EV transition.
Volvo has already started European production of its EX30 electric SUV at its Ghent plant, and has revealed a new extended-range plug-in hybrid SUV designed specifically for the Chinese market, the XC70. However, the drop in the European EV market forecast could have implications for the EV supply chain.
An earlier 5% reduction in staff numbers occurred at Volvo's Ridgeland, South Carolina, US plant, resulting in 125 roles being terminated. Despite the redundancies, Volvo aims to continue ensuring the development of the talent it needs for its ambitious future.
Samuelsson attributed the need for these changes to the challenging period and shifting landscape of the automotive industry. He emphasised that these changes are necessary to secure Volvo's long-term future and ensure its continued success in the EV market. The company expects all structural changes resulting from this review to be completed by Q3 2025.
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