Volvo Cars steps up cost-efficiency initiative for long-term sustainable growth
Volvo Cars today announces plans to further accelerate its ongoing transformation, with increased focus on its cost optimisation and resource efficiency initiative.
The company has laid out clear strategic ambitions for the future, including increasing its growth and becoming 100 per cent electric by 2030, while constantly reducing its overall CO2 footprint.
To ensure the company delivers on those ambitions, it will take the next step in securing a more efficient and sustainable cost base for the future.
It will also restructure and change ways of working in certain parts of the organisation and accelerate its efforts to drive efficiency, while at the same time ensuring the company has all the relevant skills it needs to be successful in next-generation mobility.
As a result, the company today announces it estimates it will reduce around 1,300 positions for office-based employees* from its operations in Sweden.
Around 1,100 positions for employees will be reduced at its main global operating unit (Volvo Personvagnar AB), which is why Volvo Cars has today negotiated with the unions and issued a notice for those office-based positions to Swedish authorities (the Swedish Arbetsförmedlingen).
The remaining 200 positions will be identified following a review throughout our legal entities across Sweden. The above represents around 6 per cent of the total number of employees in Sweden.
In addition, the company will reduce costs and drive efficiencies across its global operations over the coming months. It will also review and reduce the number of consultants and bought services.
The exact nature and specific number of job reductions will be determined over the coming period, once the optimal structural set-up has been determined and a review of all entities has been carried out. The reductions will comply with relevant local requirements.
Production line jobs** at the company’s manufacturing operations will not be affected at this stage.
“The cost actions we initiated last year have started to bear results in some key areas, such as material costs,” said Jim Rowan, chief executive of Volvo Cars. “However, it’s clear that we need to do more. Economic headwinds, increased raw material prices and increased competition are likely to remain a challenge to our industry for some time.”
“The industry is also transforming quickly – on electrification, software and core computing technologies, as well as direct customer engagement,” Jim Rowan added. “We gained early mover advantage and are advancing towards our 100 per cent electric ambition. We will continue to invest in the skills, technologies and tools needed to help create safe and sustainable mobility for our customers. Implementing structural change and driving increased efficiency across the entire company allows us to do this.”
Given the likely long-term nature of the headwinds the automotive industry is currently facing, the accelerated cost and efficiency actions are designed to position Volvo Cars to continue delivering effectively on its ambitious transformation goals.
Notes to editors
* Also commonly known as white-collar positions
** Also commonly known as blue-collar positions
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Volvo Cars in 2022
For the full year 2022, Volvo Car Group recorded an operating profit of SEK 22.3 billion. Revenue in 2022 amounted to SEK 330.1 billion, while global sales reached 615,121 cars.
About Volvo Car Group
Volvo Cars was founded in 1927. Today, it is one of the most well-known and respected car brands in the world with sales to customers in more than 100 countries. Volvo Cars is listed on the Nasdaq Stockholm exchange, where it is traded under the ticker “VOLCAR B”.
Volvo Cars aims to provide customers with the Freedom to Move in a personal, sustainable and safe way. This is reflected in its ambition to become a fully electric car maker by 2030 and in its commitment to an ongoing reduction of its carbon footprint, with the ambition to be a climate-neutral company by 2040.
As of December 2022, Volvo Cars employed approximately 43,200 full-time employees. Volvo Cars' head office, product development, marketing and administration functions are mainly located in Gothenburg, Sweden. Volvo Cars' production plants are located in Gothenburg, Ghent (Belgium), South Carolina (US), Chengdu, Daqing and Taizhou (China). The company also has R&D and design centres in Gothenburg, Camarillo (US) and Shanghai (China).
For further information please contact:
Volvo Cars Media Relations
+46 31-59 65 25
Volvo Cars Investor Relations
+46 31-793 94 00