Volvo Cars, which is majority-owned by China’s Geely Holding , on April 29 unveiled a programme to slash costs by 18 billion Swedish crowns ($1.9 billion) and hit the brakes on investments, warning that redundancies were inevitable.
In the first quarter, the auto maker had 43,500 full-time employees and 3,000 staffing agency personnel, according to its earnings report. Volvo Cars said in a statement the reductions will primarily affect office-based positions in Sweden and represent around 15% 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.
As the group announced its cost cuts last month it also withdrew its financial guidance, pointing to unpredictable markets amid weaker consumer confidence and trade tariffs causing turmoil in the global auto industry. On Friday U.S. President Donald Trump threatened to impose a 50% tariff on imports from the European Union from June 1, but on Monday he backed away from that date, restoring a July 9 deadline to allow for talks between Washington and Brussels. Samuelsson on Friday told Reuters customers would pay a big part of any tariff-related cost increases, and that a 50% levy could make it impossible to import one of its most affordable cars, the Belgium-made EX30 electric vehicle, to the U.S. ($1 = 9.4829 Swedish crowns)
