Sweedish automobile manufacturer, AB Volvo recently said it plans to cut its white-collar workforce by around 4,100 positions during the second half of 2020 due to the effects of the COVID-19 pandemic.
The recent development at Volvo follows a similar measure taken by fellow truck maker Scania to reduce jobs due to the coronavirus pandemic.
“The COVID-19 crisis is expected to have a negative effect on economic activity in many of the Volvo Group’s major markets in the short and medium term. Volvo has continuously adjusted its operations to lower demand from record levels in the first half of 2019 by utilizing the installed flexibility, while at the same time accelerating the transformation towards sustainable transport solutions. As the next step, the Volvo Group plans to further reduce the white-collar workforce globally by approximately 4,100 positions during the second half of 2020,” said the company in a statement.
Since mid-2019, the Volvo Group has adjusted its activity levels by using the installed flexibility, terminating temporary and consultant contracts. Out of the 4,100 positions, around 15% are consultants. Approximately 1,250 of these positions are in Sweden.
However, the company said that the need for staff reductions would have been higher without various governmental support packages enabling short-term layoffs and other similar measures.
The staff reductions will be carried out in different ways across the Group, depending on the local business situation, country legislation and labor market practices. In some countries, including Sweden, the planned measures include notices of redundancy, said the company.
“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,” says Martin Lundstedt, the company CEO.
He further added, “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.”
The Gothenburg-based company, which employs some 104,000 staff, said late in April that net order intake of its trucks had dropped by 75% in March versus February and been net negative since then.
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