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Volvo Group Cuts Costs To Accelerate Transformation

The automaker plans to further reduce its white-collar workforce globally by approximately 4,100 positions.

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With the COVID-19 crisis expected to have a negative effect on economic activity in many of the Volvo Group‘s major markets in the short- and medium-term, the automaker has continuously adjusted its operations to lower demand, while at the same time accelerating the transformation toward sustainable transport solutions. As a next step, the Volvo Group says it plans to further reduce the white-collar workforce globally by approximately 4,100 positions during the second half of 2020.

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“The Corona epidemic and the global measures taken to fight it has led to a market situation impacting our industry severely. The effects are expected to be lower demand going forward and we need to continue to adjust our organization accordingly. In parallel, we will accelerate the competence shift needed for new technologies and business models,” said Martin Lundstedt, president and CEO of the Volvo Group. 

Since mid-2019, the Volvo Group has adjusted its activity levels by using the installed flexibility, terminating temporary and consultant contracts. During the second half of this year, the Group plans to further decrease its white-collar workforce by approximately 4,100 positions, 15% of which are consultants. Approximately 1,250 of these positions are in Sweden. 

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The automaker said the need for staff reductions would have been higher without various governmental support packages enabling short-term layoffs and other similar measures.

The staff reductions will be carried out in different ways across the Group, depending on the local business situation, country legislation and labor market practices. In some countries, including Sweden, the planned measures include notices of redundancy. 

“The Volvo culture will continue to be our guiding star in this work, where we will work as one team together with the unions to make this adjustment in a responsible way,” said Lundstedt. “With these changes the Volvo Group will maintain a position of strength, be adapted to the new market situation and continue to be a leader in the transformation toward sustainable transport and infrastructure solutions.” 

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