Volvo Cuts 3,000 Professional Workers Amid EV Slowdown And Automotive World Uncertainty

Production process EX30 in Gent, Belgium. (Doc. Volvo)

JAKARTA - Volvo announced a significant restructuring that would lead to a reduction of around 3,000 jobs, especially in professional worker positions who do office, administrative, or managerial work.

This decision, announced on Monday, May 26, was reported by a Reuters report. Volvo took this policy amid the Swedish automaker struggling to face high costs, slowing demand for electric vehicles (EVs), and ongoing trade uncertainty.

The job cuts are part of a broader cost-saving initiative, with a target of cutting 18 billion Swedish krona (approximately IDR 30.8 trillion), which was originally announced in April. The move aims to strengthen the company's financial condition and boost its share price.

According to CEO Hakan Samuelsson, who recently returned to office, layoffs will include various departments, including Research & Development, Communication, and Human Resources. He believes that this restructuring will result in healthier organizations, cost savings, and opportunities for employees to take on greater responsibility.

Fredrik Chief Financial Officer Hansson indicated that although all departments and locations would be affected, most reductions would occur in Gothenburg. He stressed that this is a strategic step to comprehensive structural efficiency.

The layoffs announced represent about 15 percent of Volvo Cars office staff globally and will cost one-time restructuring of 1.5 billion kronas.

Volvo Cars faces various challenges, especially as most of its production is based in Europe and China, so it is very vulnerable to new US tariffs. The company previously stated that the potential tariffs could make exports of its more affordable models to the US unfit. Although US President Trump recently extended the deadline for charging European Union goods until July 9, uncertainty remains.

Handelsbanken analyst Hampus Engellau noted that the layoff scale was in line with expectations and saw the downsizing of operations as a positive step for the company.

Interestingly, Volvo Cars shares increased by 3.6 percent on Monday afternoon, with most of this increase taking place before the announcement of layoffs. However, the shares have still fallen 24 percent since the beginning of the year.