Volvo Cars Axe Out 1300 White-Collar Jobs In Sweden For Cost-Optimization

The Chinese-origin Volvo Cars of Sweden, on Thursday, decided to bring down 1300 office jobs in Sweden in a bid to reduce overheads.

Considering the results noted on the cost-cutting measures taken last year, CEO Jim Rowan of Volvo Cars Sweden concluded to do more erasing of the white-collar jobs in the coming months.

The main reasons in cutting short the manpower are largely due to increase in the prices of the raw materials, economic headwinds and surging competition in the automobile market.

The curtailment is primarily going to affect about 6 per cent of the employees having their base in Sweden.

The notice of redundancy has been issued to about 1100 employees in the main global operating unit. Whereas, the next 200 positions would be determined after a brief review of the business bent in Sweden.

Even so, the workforce in the production line of the automobile company will be on a safe boat.

Into the bargain, this employment slashing is just a start in Sweden perhaps, and the coming months would witness similar cost-cutting in the Volvo Cars global industry.

The slacking announcement was done after negotiation with the union, considering the material costs and stakes. Nonetheless, the reduction in manpower is in comply with all the relevant local essentials.

This, therefore, is a major challenge that seems to outbreak during the economic setback across the globe, that also includes the consultancies. The abrupt price disciplines could be seen as a repercussion of the warning impact of the recent Russo-Ukrainian War.

Jim Rowan, the CEO, is planning to axe out the office jobs at present, but is still figuring which specific jobs would be phased out. The outcome of the new measures is yet to be sought, however, Rowan and team are working through the facts.

Talking about numbers, the carmaker company has seen a turbulent reduction in its net profit margin from 4.5 billion kronor last year to 3.98 billion this year.

In late April, the World No. 2 truck maker had already been in thoughts in regard to the targeted downsizing. Despite having higher sales, profits in the first-quarter noticed a drop.

The Scandinavian nation reported Volvo Cars vehicle sales of 10 per cent to 162,900, and a revenue of 29 per cent surge generating $9.3 billion (95.7 billion kronor).

Owing to the sudden hit, the market shares of Volvo Cars also went down by 3.87%.

Even though the news of unforeseen sacking is little disturbing, the carmaker offers a promising sustainable and safe mobility for its customers by investing on the right technology, skills and tools.

The multinational manufacturer of luxury vehicles is focusing on more opportunities to be effective in its whole network. The company is now offering its services to more than 80 countries worldwide.

Jim Rowan pointed out that the auto industry is on a rapid transformation with direct consumer engagement, software, electrification and core computing innovations.

The Geely-owned automobile company is aiming to go electric alongside the universal trends. It had sold out 5 electric cars in the first quarter of 2023.

Playing with numbers, their target is to achieve 100 per cent electric vehicles by 2030. Likewise, it is on a mission to reduce its carbon footprint with some novel strategic ambitions.

Torslanda, Gothenberg in Sweden houses the company’s administration, marketing, product development and is the Head Office. Whereas, the production plant of multinational automotive is located in South Carolina (U.S.A), Ghent (Belgium), Gothenberg, Daqing, Taizhou, and Chengdu (China). Shanghai (China) and Camarillo (U.S.A) lodges the design center and the R&D Sector of Volvo Cars.

The global economy has suffered a major downfall in the past few years, and impromptu layoffs and efficiency drive are on the rising, leading to employment shortages among the young and old alike.

This initiative of resource efficiency and cost optimization is impacting not only the automobile industry but the other tech sectors as well.

Proofread & Published By, Naveenika Chauhan