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Sales slumber prompts 1,000 Volvo job cuts

Sales slumber prompts 1,000 Volvo job cuts

Published: 20 Feb 2013 15:14 GMT+01:00
Updated: 20 Feb 2013 15:14 GMT+01:00

Volvo Cars said on Wednesday it was preparing to axe 1,000 mostly white-collar jobs as car sales in Europe have fallen to a two-decade low.

Volvo Cars saw its sales shrink by 18 percent in January 2013, and on Wednesday CEO Håkan Samuelsson told Sveriges Television (SVT) staff cuts were in the works as part of an effort to save money at the company.

The Sweden-based carmaker, which is owned by Chinese automaker Geely, already slimmed down its organization by 1,100 jobs in the autumn of 2012.

"We have to adapt to reality. We've done that on the work floor, now we have to do it in the offices," Samuelsson told SVT.

Car sales are depressed across the EU. There haven't been so few cars sold in January since the industry organization Acea started collecting sales figures in 1990, SVT noted.

Auto industry subcontractor association FKG fear Volvo's 1.5 billion kronor ($237 million) cost reduction programme will hit consultants hard.

"There are many smaller consultancy companies in Gothenburg with 20 to 40 employees where many work with Volvo," CEO Fredrik Sidahl told SVT.

He warned that some companies would face bankruptcy if the Volvo contracts dried up.

Union representatives, meanwhile, responded to the news by saying that Volvo Cars owner Geely Holding should step in and inject cash.

"Our new owners need to step up to the plate and prove they are serious about long-term investing in Volvo," Magnus Sundemo, spokesman for the Volvo chapter of Akademikerklubben told SVT.

The company's CEO said instead that it was time for the company to stand on its own two feet.

TT/The Local/at

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Your comments about this article

00:17 February 21, 2013 by V70
Volvo...this is disconcerting ..

The Product Mix/Price points are out of sync...

Will the Chinese continue to support the Product..

Or is there another SAAB in the future
10:09 February 25, 2013 by Kronaboy
Sorry to be the bearer of bad news Sven, but I think you will find the Chinese are less tolerant of your over paid under performing racist nepotism; as I have stated before, once they have concluded their technology transfer (copy rights included) don't be too shocked if the whole manufacturing process is shipped somewhere further east (my money is on Bulgaria).
00:19 February 26, 2013 by Escort
Volvo needs to field a more competitive range and price its cars more realistically or it risks destroying the existing customer base. The lower end of the range needs attention as the V40 is overpriced and there is no "B" segment car to compete with the popular Audi A1, BMW Mini, VW Polo etc. Many European buyers are downsizing and this trend will continue as more and more premium small cars come on to the market.
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