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Volvo Group will reduce its white-collar workforce by 4,100 starting in the second half of the year as it confronts lower demand during the novel coronavirus pandemic.
About 15% of those let go will be consultants, and 1,250 of the positions are in Sweden.
Volvo Group’s heavy-duty U.S. brands include Mack Trucks and Volvo Trucks North America.
There will be an impact on Mack and VTNA, “but we are not prepared to quantify it at this time,” John Mies, senior vice president, corporate communications for the brands, told Transport Topics.
“The impact will primarily be in Greensboro, N.C., where each brand has its headquarters,” he added.
Mack and VTNA announced layoffs earlier in the year at production facilities as they adjusted to lower demand for heavy-duty trucks, independent of the yet-to-emerge pandemic.
“The coronavirus pandemic and the global measures taken to fight it have led to a market situation impacting our business severely,” Volvo Group CEO Martin Lundstedt said in a release. “The effects are expected to be lower demand going forward, and we need to continue to adjust our organization accordingly. In parallel, we will accelerate the competence shift needed for new technologies and business models.”
The need for staff reductions would have been higher without various governmental support packages enabling short-term layoffs and other similar measures, according to the Gothenburg, Sweden-based company.
Reductions will be carried out in different ways, depending on the local business situation, country legislation and labor market practices. In some countries, including Sweden, the planned measures include notices of redundancy (and payments to those affected).
“The Volvo culture will continue to be our guiding star in this work, where we will work as one team together with the unions to make this adjustment in a responsible way,” Lundstedt said. “With these changes, the Volvo Group will maintain a position of strength, be adapted to the new market situation and continue to be a leader in the transformation towards sustainable transport and infrastructure solutions.”
Volvo Group employs 104,000 people and serves customers in more than 190 markets. In 2019, net sales were $45.6 billion.
For the period ended March 31, Volvo (reporting in Swedish krona) had net income the approximate equivalent of $470 million, or 23 cents per diluted share. That compared with $1.1 billion, or 52 cents, in the year-ago period.
Revenue fell to $9 billion from $10.6 billion a year earlier.
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