Volvo confirms 3000 job cuts as part of £1.4bn savings drive

Volvo has announced that it will axe 3000 jobs worldwide as part of a £1.4 billion turnaround plan.

The firm last month announced that there would be redundancies as part of the wide-reaching cost-cutting initiative and has now confirmed how many – a figure that accounts for 15% of its global office-based workforce.

Volvo said the cuts mainly impact its offices in Sweden, with 1200 employee-held positions being made redundant there, and another 1000 Swedish consultancy roles being axed. 

The remaining roles are in other global markets, but Volvo says it will give specifics "once the company has finalised a review of its entire organisation and determined a new structural set-up".

It aims for the workforce reduction process to be completed by the end of autumn and says the restructuring will cost approximately £116 million, which will be reflected in this quarter's financial results – to be revealed on 17 July. 

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

"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.”

Announcing the savings plan last month, Volvo said it was striving "to protect profitability and drive structural efficiencies on direct and indirect costs, as well as helping to offset external headwinds" and that most of the effects will be realised next year.

Expecting that 2025 will be a "challenging and transition year, given the uncertainties around macroeconomic, geopolitical and market developments", Volvo said it will no longer provide financial guidance for 2025 and 2026. 

The news comes just weeks after former CEO Håkan Samuelsson was reappointed following the departure of Jim Rowan after three years.

Last month, the company also replaced chief financial officer Johan Ekdahl with his deputy Fredrik Hanson.

The strategy was announced following a turbulent first financial quarter of the year, in which Volvo's global deliveries dropped 6% year on year to 172,000, resulting in an 11.7% drop in revenue from £7.3bn to £6.4bn.