Volvo Cars cuts 1,300 Swedish jobs as coronavirus pandemic speeds up change
Volvo Cars will lay off 1,300 white-collar employees in Sweden, with the carmaker saying it needs to step up its shift to new products and business models amid the coronavirus pandemic.
The layoffs have become more urgent as measures to isolate populations and restrict travel weigh on car sales, Volvo said. The pandemic has forced carmakers around the globe to halt production and react to a rapid slump in demand. Volvo reopened its factories in Sweden last week after an almost month-long shutdown.
“We can’t expect customers to come back and demand exactly the same products as before the crisis," Chief Executive Hakan Samuelsson said in a phone interview. “The coronavirus means that it’s even more important to change rapidly, and doing it by voluntary redundancies won’t be fast enough."
Zhejiang Geely Holding Group Co. bought Volvo Cars from Ford Motor Co. in the wake of the financial crisis. Since then, the carmaker has revamped its lineup and invested in new business models, including subscription services and car-sharing. It has also launched its first all-electric model and aims to raise its total of all-electric cars to 50% of overall sales by 2025. The layoffs announced on Wednesday will reduce staffing in “non-focus areas," such as activities related to combustion engine production and testing, Samuelsson said.
Manufacturing operations will not be affected by the cuts, the company said.