SHARE
COPY LINK

CONSTRUCTION

New Swedish lay offs at Volvo Group

Volvo Construction Equipment (CE), part of Sweden’s Volvo group, announced on Thursday that 850 more employees would be laid off in Sweden.

New Swedish lay offs at Volvo Group

The new cuts come on top of the 500 redundancies the company announced earlier this autumn.

Volvo cited a worldwide slow-down in the construction equipment market, which has been worsened by the current financial crisis, as the cause of the job cuts.

“The actions we are taking now are needed in order to adjust production capacity to declining demand and to ensure that the company is coming out stronger from this downturn,” said the president of Volvo CE’s Hauler Loader Business Line, Yngve Rosén, in a statement.

Blue collar labourers make up nine out of ten of the workers to be given notice in the new round of cutbacks.

The company said that all of Volvo CE’s Swedish locations will be affected and that negotiations with unions would be started immediately.

Of the blue collar positions to be eliminated, 200 workers will be laid off in Arvika, Braås, and Eskilstuna, while 150 employees in Hallsberg will lose their jobs.

The company has not yet determined how the white collar redundancies will be distributed.

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.

SHOW COMMENTS