Volvo, the Swedish carmaker, has announced plans to cut 3,000 white-collar jobs as part of a major restructuring effort. This decision comes in response to rising prices and uncertainty caused by tariffs. The company revealed the layoffs on Monday, aiming to improve its share price and boost demand for its vehicles.
CEO Hakan Samuelsson, who recently returned to the role after a brief hiatus, outlined a cost-cutting program that aims to save $1.9 billion, or about 18 billion Swedish crowns. This initiative includes significant reductions in its white-collar workforce, which makes up 40% of Volvo’s total employees. Samuelsson noted that the cuts would affect nearly all areas, including research and development, communication, and human resources.
According to Volvo, the layoffs will account for approximately 15% of its office staff and will incur a one-time restructuring cost of $160 million, or 1.5 billion crowns. Fredrik Hansson, the new Chief Financial Officer, indicated that while all departments and locations will feel the impact, most job losses will occur in Gothenburg, where the company is headquartered.
The restructuring is a strategic move to enhance efficiency across the organization. Hansson emphasized that no area would be spared in this effort. With most of its production based in Europe and China, Volvo is particularly vulnerable to new tariffs imposed by the United States, which could make it difficult to export its more affordable models.
Volvo has also withdrawn its financial guidance, citing unpredictable market conditions and weak consumer confidence, which have been exacerbated by ongoing trade tensions. The announcement of job cuts coincided with recent threats from U.S. President Donald Trump regarding potential tariffs on imports from the European Union. Although Trump has since postponed the implementation of these tariffs, the uncertainty continues to pose challenges for Volvo, especially in selling its electric vehicles in the U.S. market.
The company plans to finalize its new organizational structure by the third quarter of this year, as it seeks to adapt to a rapidly changing automotive landscape.