Volvo Cars, the Swedish luxury car manufacturer, has announced plans to accelerate its transformation by focusing on cost optimization and resource efficiency initiatives. The company has laid out clear strategic ambitions, including becoming 100% electric by 2030, while constantly reducing its overall CO2 footprint. To achieve these goals, Volvo Cars plans to secure a more efficient and sustainable cost base for the future, restructure and change ways of working in certain parts of the organization, and accelerate its efforts to drive efficiency.
As a result, the company estimates that it will reduce around 1,300 positions for office-based employees from its operations in Sweden, representing approximately 6% of the total number of employees in Sweden. The company plans to reduce costs and drive efficiencies across its global operations over the coming months, review and reduce the number of consultants and bought services. Production line jobs at the company’s manufacturing operations will not be affected at this stage.
Jim Rowan, the chief executive of Volvo Cars, stated that the cost actions initiated last year have started to bear results in some key areas, such as material costs. However, economic headwinds, increased raw material prices, and increased competition are likely to remain a challenge to the industry for some time. The industry is also transforming quickly, especially in electrification, software, and core computing technologies, as well as direct customer engagement.
“We gained early mover advantage and are advancing towards our 100% electric ambition,” Rowan added. “We will continue to invest in the skills, technologies, and tools needed to help create safe and sustainable mobility for our customers. Implementing structural change and driving increased efficiency across the entire company allows us to do this.”
The exact nature and specific number of job reductions will be determined over the coming period, once the optimal structural set-up has been determined, and a review of all entities has been carried out. The reductions will comply with relevant local requirements.
Volvo Cars’ accelerated cost and efficiency actions are designed to position the company to continue delivering effectively on its ambitious transformation goals, given the long-term nature of the headwinds the automotive industry is currently facing.