Volvo Car Corporation is to axe 2,000 more blue collar and another 700 white collar employees in Sweden, 600 workers outside its home country and terminate about 700 contracts with consultants, the automaker said on Wednesday.
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On June 25 it had said it would eliminate the jobs of 2,000 workers including 500 consultants. Planned redundancies now total 6,000 worldwide, including 1,200 consultants.
“These are difficult times for the car industry in general, including Volvo. These actions are necessary to create a new and sustainable Volvo Car Corporation – a company with more focused operations and structure,” said the Ford-owned company’s president and CEO, Stephen Odell.
“The unstable economic environment has resulted in a very unpredictable situation, and the downturn in the global car industry is more drastic than expected,” Odell added.
Volvo today told Swedish authorities it was sacking 2,230 employees at Volvo Car Corporation in Gothenburg, 410 at a body components factory in Olofström and 60 at the engine plant in Skövde/Floby.
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By GlobalDataVolvo had last month estimated that another 900 blue collar employees would be affected but said today: “Given the turbulence in the world economy over the last few weeks, however, it is clear that further costs saving actions are necessary for the company to manage the difficult market situation.”
Today’s announcement would delay negotiations begun last June with the unions as the latest round of cuts had to be integrated with the previous plan.
“The new organisation is expected to be in place by the end of the year,” the automaker said.
COO Steven Armstrong last week told just-auto: “We have to right-size the manufacturing footprint that we have and we have already announced some layoffs and taken a shift out of Torslanda. So we have to make sure our costs better balance with a lower revenue stream – for the whole industry, not just us.
“In the near term, trying to make sure we are as cost-efficient as we can be is taking up a lot of my team’s energy.”
A Volvo UK spokeswoman said the local unit had not yet been advised of any effects from the cuts announced in Sweden today.
