Car manufacturer Volvo will cut some 3,000 white-collar jobs as it plans to restructure operations as a result of high costs, trade tariffs, and low demand for electric vehicles (EVs).
Sources close to the company quoted officials who highlighted plans to slash costs by 18 billion Swedish crowns ($1.9 billion).
The company said in a statement that the reductions will primarily affect office-based positions in Sweden and represent around 15 percent of the total office-based workforce globally.
“The automotive industry is in the middle of a challenging period. To address this, we must improve our cash flow generation and structurally lower our costs,” CEO Hakan Samuelsson said.
Volvo Cars has its main headquarters and product development offices in Gothenburg, Sweden, and makes cars and SUVs in Belgium, South Carolina, and China.
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In 2021, the company announced that all of its cars would be electric by the end of the decade but reviewed its target last year, citing challenging market conditions.
Volvo Cars would be the latest carmaker to announce job cuts, following Nissan, which said it would cut some 11,000 worldwide and close down seven factories as part of its restructuring efforts.
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Volvo Cars is majority-owned by China’s Geely Holding. The manufacturer’s workforce, according to reports, is estimated at 43,500 full-time employees and 3,000 staffing agency personnel.
EVs made in China are said to be facing increased tariffs when sent to the EU and the United States. Demand for EVs is also low as customers complain about inadequate charging infrastructure.
