Volvo Cars, the Sweden-based automotive manufacturer owned by Chinese group Geely Holding, has announced plans to reduce its workforce by approximately 3,000 jobs. The company now expects an 11% drop in overall global sales for April, year-on-year. In light of these factors, they have chosen to do so. These layoffs will largely come in the form of office-based roles in Sweden and account for roughly 15% of Volvo’s white-collar employees.
Those job cuts are just the tip of an iceberg of cost-cutting efforts. Last month the firm revealed a new five-point “action plan”, costing 18 billion Swedish kronor ($1.9bn, £1.4bn). This strategic shake up reflects an industry responding to the challenges facing the global motor industry. Growing material costs and a recent slowdown in sales in Europe have played into such a dramatic switch. The effect of US tariffs on imported vehicles has added further complications and uncertainties to the equation for Volvo and other manufacturers.
Among the other players, Ford sold Volvo Cars to Geely in 2010. Today, it has grown to run large manufacturing plants in Sweden, Belgium, China, and the United States. The corporation first committed to electrifying all of its fleet vehicles by 2030. A lot has happened recently that has forced it to scale back those ambitions. Factors contributing to this shift include intensified competition from rivals and price reductions from Chinese electric vehicle giant BYD, which recently outsold Tesla in Europe for the first time, according to industry research firm Jato Dynamics.
Håkan Samuelsson, President and CEO of Volvo Cars, admitted that this has been an especially tough time for decision making amid this time of change and evolution.
“The actions announced today have been difficult decisions, but they are important steps as we build a stronger and even more resilient Volvo Cars,” – Håkan Samuelsson
Volvo Cars is under attack on all sides, as competition heats up not only within their own sector but from tech and auto outside forces. The intense battle between automakers to conquer the EV market only grows fiercer, driven by changing consumer demand and a rapidly changing marketplace. The European market’s changing dynamic is further impacted by the current geopolitical situation and tariff considerations.