Volvo promotes restructuring plan, plans to lay off 3,000 employees
Volvo announced it will lay off 3,000 employees, primarily affecting positions in its Swedish offices, as part of its restructuring plan. The company is facing challenges from high costs and a slowdown in electric vehicle demand, planning to cut costs by 18 billion Swedish Krona (1.9 billion USD). CEO Hakan Samuelsson stated that the automotive industry is in a difficult period and needs to improve cash flow and reduce costs. Volvo also withdrew its financial guidance, citing increased market uncertainty
According to the Zhitong Finance APP, Volvo (VLVLY.US), headquartered in Sweden, announced on Monday that it will lay off 3,000 employees, most of whom are white-collar workers, as part of a restructuring plan announced last month. The company is struggling to cope with high costs, a slowdown in electric vehicle demand, and uncertainties related to trade tariffs.
Volvo announced a plan to cut costs by 18 billion Swedish Krona (1.9 billion USD) on April 29 and warned that layoffs were inevitable.
Financial reports show that the company had 43,500 full-time employees and 3,000 temporary workers in the first quarter of this year.
Volvo stated in a press release that the layoffs will primarily affect office positions in Sweden, accounting for about 15% of the total global office workforce.
Volvo CEO Hakan Samuelsson stated, "The automotive industry is going through a challenging time. To meet this challenge, we must improve our cash flow generation capabilities and structurally reduce costs."
While announcing cost cuts last month, the group also withdrew its financial guidance, citing weakened consumer confidence and trade tariffs leading to turmoil in the global automotive industry, making the market unpredictable.
Last Friday, U.S. President Donald Trump threatened to impose a 50% tariff on goods imported from the European Union starting June 1, but on Monday he changed his mind and set July 9 as the deadline for negotiations between Washington and Brussels.
Samuelsson stated last Friday that consumers would bear a significant portion of the cost increases associated with tariffs, and a 50% tariff could make one of Volvo's most affordable cars—the Belgium-made EX30 electric vehicle—unable to enter the U.S. market
