Volvo reduces workforce in cost-cutting drive

Volvo Cars has announced global redundancies as it seeks to reduce its workforce by around 15%.

Most of the job cuts will come from office-based roles, rather than manufacturing. The company confirmed around 1,000 of roles to be terminated are held by consultants.

The redundancies are part of a £1.4bn programme to create a leaner, more efficient organisation with a structurally lower cost base.

“The actions announced today have been difficult decisions, but they are important steps as we build a stronger and even more resilient Volvo Cars,” said Håkan Samuelsson, Volvo Cars president and CEO.

He added: “The automotive industry is in the middle of a challenging period. To address this, we must improve our cash flow generation and structurally lower our costs. At the same time, we will continue to ensure the development of the talent we need for our ambitious future.”

Samuelsson was reappointed as CEO in April, having previously held the post between 2012 and 2022.

Last year, Volvo was forced to alter its electrification ambitions due to lower-than-expected demand for electric cars. Citing challenges in the broader automotive market's shift to electrification, Volvo's revised strategy allows up to 10% of sales to include mild-hybrid vehicles - with electric and plug-in hybrids making up the remainder of the mix until 2035.

Electric vehicle sales remain a challenge across Europe, with sales accounting for just 17% of all newly-registered cars in April.

In the UK, Volvo achieved a strong first quarter, with vehicle sales up by 39% on Q1 2024.