The automotive industry faces rising tariffs, heightened material costs, and declining sales, prompting significant layoffs from key players like Volvo and Nissan.
Volvo Cars Announces Significant Job Cuts Amid Industry Challenges
Volvo Cars Announces Significant Job Cuts Amid Industry Challenges
Sweden's Volvo Cars, owned by China's Geely, to reduce workforce by 3,000 as part of cost-reduction strategy.
Sweden-based automaker Volvo Cars has declared plans to lay off approximately 3,000 employees as part of its efforts to cut costs and streamline operations. This workforce reduction will predominantly affect office-based roles in Sweden and represents about 15% of the company’s white-collar staff.
Last month, Volvo Cars, owned by the Chinese conglomerate Geely Holding, disclosed an extensive 18 billion Swedish kronor ($1.9 billion; £1.4 billion) "action plan" aimed at restructuring the organization. The global automotive sector is grappling with numerous obstacles, including U.S. President Donald Trump's 25% tariffs on imported vehicles, rising material costs, and sluggish sales in European markets.
Håkan Samuelsson, the chief executive of Volvo Cars, emphasized the tough nature of the decisions being made, stating that these actions are necessary to fortify and enhance the company's resilience. April sales figures recently released by the company indicated an 11% dip compared to the same month last year.
Volvo Cars maintains its primary headquarters and development facilities in Gothenburg, Sweden, while operating major manufacturing plants in Sweden, Belgium, China, and the United States. The automaker, previously owned by Ford, was sold to Geely in 2010. In 2021, the company committed to transitioning all its vehicles to electric by 2030, although it later moderated this goal due to various complications, including newly imposed tariffs on electric vehicles in different markets.
Nissan, another player in the automotive field, is also undergoing substantial layoffs, announcing that it will cut an additional 11,000 jobs globally and cease operations at seven factories in reaction to dwindling sales. The downturn in sales, particularly in China and the United States, has severely impacted Nissan's earnings, leading to a profound restructuring phase with nearly 20,000 job cuts in total over the last year.
Adding to the competitive nature of the industry, Chinese electric vehicle manufacturer BYD recently proclaimed significant price reductions across more than 20 of its models, strategically lowering the cost of its entry-level Seagull EV to around 55,800 yuan ($7,745; £5,700). This prompted multiple rivals, including state-owned Changan and Stellantis-backed Leapmotor, to follow suit with their own price cuts, leading to a sharp decline in shares among Chinese automotive brands.
According to data from car industry research firm Jato Dynamics, BYD notably outsold Tesla in Europe for the first time in April, highlighting the intense rivalry and rapid shifts within the automotive marketplace.
