1 June 2025
Photo: Brandon Bell / Staff (Getty Images)
In a move already anticipated in late April, automaker Volvo announced yesterday that it is cutting 3,000 jobs as part of a vast cost-cutting plan due to the crisis that is plaguing the company, as well as the entire European auto industry. In fact, the layoffs come as the automaker seeks to resurrect its stock price and boost demand by restructuring part of its business. Most of the cuts are expected to hit Swedish workers and, specifically, the so-called “white collar” workers in the automaker's offices, who would account for the largest share of employees, even more than blue collar workers.
The restructuring plan for the automaker, which has been owned by the Chinese multinational conglomerate Geely Holding since 2010, will save it up to 1.9 billion euros. An integral part of this plan is the layoff of 3,000 workers, 40 percent of whom are “white collar” workers, i.e., those who work in various offices, especially in communications and human resources. Volvo has a global workforce of around 44,000, of which 29,000 are in Europe.
In the first quarter, the company reported an operating profit of 175 million euros compared to 433 million in the same period last year. The automaker's shares have fallen a lot in the last period, with declines of up to 10 percent before rising again, but without regaining the decline they had. To revive its value, the company has also put in place a plan to buy back its own shares. The causes of Volvo's crisis thus include its falling stock value, declining sales, and the collapse of the electric vehicle market on which Volvo had staked everything.
Volvo's CEO, Hakan Samuelsson, who was recently returned to that role after heading the company for a decade until 2022, referred to the strong competition in the electric car market, but without mentioning China-the undisputed queen in this segment of car production. Yet Volvo intends to become an all-electric automaker. “With five fully electric cars (EVs) already on the market and five more models in development, full electrification remains a key pillar of Volvo Cars' product strategy. Its long-term goal remains to become an all-electric car company, and it also aims to achieve zero net greenhouse gas emissions by 2040,” it says on the automaker's website.
The uncertainty in the European market, which has already been in severe crisis for a couple of years primarily due to strong competition from China, is also due to the tariff threats of Trump who proposed, and then suspended, a 25 percent tariff on the import of vehicles within the United States. “We need to get back to some kind of trade agreement with the United States. Otherwise, this will obviously be very difficult for business in the United States,” Samuelsson said. Regarding the general European auotomotive crisis, whereby the EU has decided to revise the Green Deal and green transition goals to a large extent, the Volvo CEO said, “The automotive industry is in the middle of a difficult period. To address this, we need to improve our cash flow generation and structurally reduce our costs.”
The crisis is deep, and even the large and prestigious European brands, such as those in Germany and so now Volvo, are being forced to cut back to try to keep up with the cutthroat competition in the global vehicle market. Of course, the first to lose out are always the workers.
https://www.media.volvocars.com/global/en-gb/media/pressreleases/349505/volvo-cars-announces-redundancies-as-part-of-cost-and-cash-action-plan
https://www.media.volvocars.com/global/en-gb/media/pressreleases/349508/repurchase-of-shares-in-volvo-car-ab-publ-during-the-period-20-may-23-may-2025
