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Volvo eyes jobs boost in Sweden, but cuts in US

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Volvo eyes jobs boost in Sweden, but cuts in US
Martin Lundstedt at Volvo Group's factory on a previous occasion. Photo: Adam Ihse/TT
11:11 CEST+02:00
Sweden's Volvo Group, the world's second-biggest truck maker, announced on Tuesday that it is planning to boost its workforce in Gothenburg by another 400-500 people, thanks to an unexpected rise in profits.

Volvo Group revealed an operating income of 6.1 billion kronor ($712 million) in the second quarter of 2016, several million more than analysts had predicted ahead of Tuesday.

However, sales decreased to 78.9 billion kronor, down from 84.8 billion the previous year.

"In the second quarter we were able to continue the improvement of our underlying profitability despite declining sales, thanks to positive cost development. Sales decreased by seven percent to 78.9 billion kronor. Despite this, the underlying operating income increased to 6.1 billion kronor, corresponding to an operating margin of 7.8 percent," Volvo Group's president and CEO, Martin Lundstedt, said in a statement.

Volvo is at the end of a three-year restructuring programme aimed to cut costs and boost profits, to offset slumping demand in the US by focusing on a growing European market.

Lundstedt said that the company now needed to employ some 400-500 new workers at its truck factory in Gothenburg on Sweden's west coast.

However, he added it would meanwhile cut staff in North America by around 300.

"We need to adjust the number of employees to get a better balance between production levels, inventory levels and demand," Lundstedt told Swedish newswire TT on Tuesday.

Volvo Group, which is separate from Volvo Cars Corporation, currently employs 97,290 people worldwide, down from 104,324 in June last year.

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