Volvo Cars gave notice for a reduction of 1,300 white-collar positions in its Swedish operations, plus a continued review and reduction of consultancy contracts. The exact nature and amount of job reductions will be decided over the coming months in negotiations with the unions. The company’s manufacturing operations will not be affected.
Volvo Cars aims to lead the industry transformation in areas such as online business, electrification, autonomous drive and new mobility models. While the company has invested and grown substantially in these areas, it now aims to reduce in non-focus areas to support further growth longer-term.
Although the notices are part of the ongoing realignment of the company’s operations in line with its long-term ambitions and need for structural cost reductions, the COVID-19 pandemic has increased the pertinence of the new measures.
The coronavirus pandemic is affecting us in the short term, but we expect volumes and growth to return. So we need to continue investing in our ongoing transformation and new business areas, by reducing structural costs.—Hanna Fager, head of People Experience
Volvo Cars was the first conventional car maker to commit to electrifying its entire line-up and phasing out cars only powered by an internal combustion engine. The company also established a new and still rapidly expanding battery development lab in Torslanda, an investment of approximately 600 million SEK (US$61 million).
There are further multi-billion SEK investment plans in its Swedish operations to adapt its industrial footprint to new technologies, securing jobs in the long term.
Volvo Cars also has the ambition to become a supplier of choice for global ride-hailing firms and aims to establish five million direct consumer relationships through new forms of mobility.