Sweden-based Volvo Cars has announced a reduction of approximately 3,000 jobs as part of an extensive cost-cutting initiative. The layoffs will predominantly affect office-based roles in Sweden, accounting for nearly 15% of its white-collar employees. This action is part of an 18 billion Swedish kronor ($1.9 billion; £1.4 billion) "action plan" revealed by Volvo last month, highlighting the strain faced by the global automotive industry amid various challenges including elevated material costs and decreased sales in Europe.
Håkan Samuelsson, CEO of Volvo Cars, described this as a "challenging period" for the industry and indicated that the recent decisions, despite being difficult, are essential for enhancing the company's resilience and fortifying its future. The announcement follows a reported 11% drop in global sales for Volvo in April compared to the previous year.
Volvo Cars, which is owned by China's Geely Holding, has its headquarters and development offices located in Gothenburg, Sweden, along with major production facilities in Sweden, Belgium, China, and the US. Since being sold by Ford to Geely in 2010, the company has been focusing on transitioning to fully electric vehicles by 2030; however, recent tariff uncertainties have led to a reevaluation of those targets.
Meanwhile, Nissan has announced its intent to eliminate another 11,000 positions and close seven plants as part of a strategic restructuring in response to weak sales. In total, Nissan has reported around 20,000 job cuts in the last year, representing 15% of its workforce.
In the competitive landscape, Chinese electric vehicle manufacturer BYD recently opted to decrease the prices of over 20 models in response to market pressures, with accompanying price cuts also announced by rivals including government-owned Changan and Stellantis-backed Leapmotor. The automotive sector continues to adjust to market fluctuations, with significant implications for manufacturers globally.
