Volvo Cars announced it will lay off 3,000 jobs as part of a previously announced restructuring plan to cut costs and address slowing demand for electric vehicles.
The layoffs come as the Swedish automaker seeks to revive its severely depressed share price and boost demand for its vehicles by restructuring parts of its business and cutting costs.
CEO Håkan Samuelsson, who recently returned to the company after a decade at the helm until 2022, unveiled a $1.9 billion cost-cutting program in April, including a significant reduction in administrative staff, which comprises 40% of its workforce.
“It’s administrative jobs across almost all areas, including research and development, communications, and human resources. So it’s spread across the board, and that’s a significant reduction,” Samuelsson told Reuters. “I think this will be very beneficial, saving us money and freeing up employees to take on more responsibilities.”
Fredrik Hansson, Volvo Cars’ new chief financial officer, told Reuters that while all divisions and locations will be affected, most of the layoffs will be in Gothenburg. He added: “It’s designed to make us more structurally efficient, so the impact may vary slightly by region. But we haven’t left any stone unturned.”
Volvo Cars said in a statement that the layoffs represent about 15% of its office staff and will result in a one-time restructuring cost of $150 million.
With most of its production located in Europe and China, Volvo Cars is more vulnerable to the new US tariffs than many of its European competitors, and has stated that it may become impossible to export its affordable cars to the United States.
The company announced in a press release that it will finalize its new organizational structure by the fall of this year, that the number of employees being laid off is in line with expectations, and that the company’s move to streamline its operations is positive.
Most European automakers are facing financial difficulties and rising operating costs. With the intense competition in the electric vehicle space, many companies, such as Volvo, Nissan, and Stellantis, have laid off workers. However, the recent US tariffs have further complicated the situation.
