FRANKFURT, May 27 — Volvo Cars, the Swedish automobile manufacturer, is planning to cut approximately 3,000 administrative jobs worldwide as part of a broader effort to reduce costs, the company announced on Monday. The job cuts represent about 15% of the company’s global office-based workforce, with the majority of affected positions located in Sweden.
According to Volvo Cars CEO Hakan Samuelsson, the decision to reduce the workforce was necessary due to the challenging conditions currently facing the automotive industry. “The automotive industry is in the midst of a difficult phase,” Samuelsson explained during talks with union representatives. “In order to overcome this, costs must be structurally reduced.”
The cost-cutting measures were first announced at the end of April when Volvo reported weak first-quarter financial results. The company plans to save a total of 18 billion Swedish kronor (approximately US$1.9 billion) through various initiatives. The current restructuring package is expected to incur special costs of around 1.5 billion kronor, which will be recorded in the second quarter.
Volvo has faced significant challenges in recent years, particularly with the high costs associated with battery materials for their pure battery electric vehicles (BEVs). The company, which is controlled by the Chinese Geely Group, had initially focused on BEVs but is now planning to place greater emphasis on plug-in hybrids due to a slower-than-expected ramp-up of their pure electric car production.
In the first quarter, the proportion of pure electric cars in Volvo’s sales was 19%, a decrease of two percentage points compared to the same period last year. The company is currently unable to provide a detailed financial forecast due to ongoing uncertainty surrounding US tariffs.
Samuelsson returned to his role as CEO at the beginning of April, following the sudden departure of former boss Jim Rowan. The challenging sales environment and financial uncertainties have contributed to the need for Volvo’s current restructuring efforts.
