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900 more jobs to go from Volvo Cars

Volvo Cars announced on Friday it would be laying off an additional 900 employees.

900 more jobs to go from Volvo Cars

The new cuts come less than three months after the company announced plans to shed 1,200 workers in Gothenburg and Olofström in southern Sweden, as well as 500 consultant positions.

“We looking at a redundancy of about 900 people on account of our lower sales. We need to fit into a new suit and can’t afford to be adding to the team,” said Volvo spokesperson Olle Axelson to the TT news agency.

It remains unclear when the job cuts will take effect.

“We’re not giving anyone notice today. We’re going to review how to solve this redundancy. The current downsizing at Torslanda [factory in Gothenburg] will be joined by reductions in Skövde [in central Sweden] and Olofström,” said Axelson.

The company has decided to move up the closing of the third shift at the Torslanda factory to the beginning of October, rather than waiting to the end of the year as previously planned, according to Axelson.

VOLVO

Sweden’s Volvo regains strength after pandemic puts brakes on earnings

Swedish truck maker Volvo Group was hit by a sharp drop in earnings due to the coronavirus pandemic, but business rebounded at the end of the year.

Sweden's Volvo regains strength after pandemic puts brakes on earnings
Volvo Group CEO Martin Lundstedt. Photo: Adam Ihse/TT

In 2020, the group saw “dramatic fluctuations in demand” due to the Covid-19 pandemic, chief executive Martin Lundstedt said in a statement.

For 2021, Volvo raised its sales forecasts in its trucks division – its core business – in Europe, North America and Brazil.

However, it said it also expected “production disturbances and increased costs” due to a “strained” supply chain, noting a global shortage of semiconductors across industries.

The truck making sector is particularly sensitive to the global economic situation and is usually hard hit during crises.

In March, as the pandemic took hold around the world, Volvo suspended operations at most of its sites in 18 countries and halted production at Renault Trucks, which it owns, in Belgium and France.

Operations gradually resumed mid-year, but not enough to compensate for the drop in earnings.

With annual sales down 22 percent to 338 billion kronor (33.4 billion euros, $40 billion), the group posted a 46 percent plunge in net profit to 19.3 billion kronor (1.9 billion euros).

Operating margin fell from 11.5 to 8.1 percent.

However, the group did manage to cut costs by 20 percent.

“We have significantly improved our volume and cost flexibility, which were crucial factors behind our earnings resilience in 2020,” the group said.

Volvo's business regained strength in the second half of the year.

“Customer usage of trucks and machines increased when the Covid-19 restrictions were eased during the summer and this development continued during both the third and fourth quarters,” it said.

“Both the transport activity and the construction business are back at levels on par with the prior year in most markets.”

For the fourth quarter alone, the company reported a 38-percent rise in net profit from a year earlier.

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