The automotive industry is undergoing a major transformation as it moves towards electrification, software and core computing technologies, and direct customer engagement. In line with this, Volvo Cars has announced plans to accelerate its ongoing transformation, with a focus on cost optimization and resource efficiency.
To ensure that it can achieve its strategic ambitions, including becoming 100 percent electric by 2030 and reducing its overall CO2 footprint, Volvo Cars has decided to implement structural changes and change the way it works in certain parts of the organization.
Gallery: Volvo EX90 Excellence
As a result, it has been estimated that around 1,300 office-based positions in Sweden will be reduced, representing around 6 percent of the total number of employees in the Scandinavian nation.
Although this news is difficult for those affected, Volvo said that it is necessary to secure a more efficient and sustainable cost base for the future. The reductions will comply with relevant local requirements and production line jobs will not be affected at this stage.
Jim Rowan, the CEO of Volvo Cars, highlighted that while the cost actions initiated last year have started to bear results in some key areas, economic headwinds, increased raw material prices, and competition are likely to remain a challenge to the industry for some time.
"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," Rowan concluded.
In 2022, the Geely-owned Volvo Car Group recorded an operating profit of $2.2 billion (SEK 22.3 billion), with revenue of $32.3 billion (SEK 330.1 billion) and global sales of 615,121 cars. The company's head office, product development, marketing, and administration functions are mainly located in Gothenburg, Sweden, and it has production plants in Gothenburg, Ghent (Belgium), South Carolina (US), Chengdu, Daqing and Taizhou (China). It also has R&D and design centers in Gothenburg, Camarillo (US), and Shanghai (China).