According to foreign media reports, in the face of uncertainty in the global market, Swedish automaker Volvo Cars has taken significant cost cutting measures in the United States. Volvo Cars has laid off about 15% of its U.S. commercial department, affecting about 60 jobs, mainly at its headquarters in Mahwah, New Jersey, USA, according to people familiar with the matter. Some of the layoffs were achieved through attrition.
EX90； Image credit: Volvo Cars
The layoffs have not been publicly announced, but most of the affected employees joined during the pandemic, people familiar with the matter said. It is worth noting that Volvo Cars’ U.S. field employees are not included in this layoff.
A Volvo Cars spokesperson said: “We are taking steps to make the organization leaner and more efficient and build a more structured low-cost base. This adjustment will help us build a more profitable future in the Americas and globally. ”
The U.S. market is crucial to Volvo Cars, and although Volvo Cars’ deliveries in Europe and China declined in the first half of this year, its sales in the United States bucked the trend by 6% year-on-year to 64,680 units, while its global deliveries fell by 9% year-on-year.
The layoffs are part of Volvo Cars’ global cost reduction plan. Volvo Cars is vigorously promoting a comprehensive cost reduction plan after its operating profit plummeted by 60% in the first quarter of this year. In May, Volvo Cars announced that it would cut 15% of its global workforce (about 3,000 jobs), mainly in Sweden.
Fredrik Hansson, CFO of Volvo Cars, said: “This adjustment is designed to make us structurally more efficient. We are looking at all possibilities holistically. The company plans to cut costs by 8 billion Swedish kronor (about $1.87 billion) in response to weak demand in the US market and tariff issues. It is worth noting that Volvo Cars relies on imports for 90% of the vehicles sold in the United States. As a result, the company decided not to provide financial expectations for 2025 and 2026.
atCapacityIn terms of adjustments, Volvo Cars’ plant in Ridgeville, South Carolina, USA, also laid off employees. In May this year, the plant cut about 5% of its workforce (about 125 people) due to changes in the market environment and trade policy adjustments, including tariff factors.
It is reported that Volvo Cars’ Ridgeville plant covers an area of 2.3 million square feet and has a planned annual production capacity of 150,000 vehicles. However, data from the Automotive News Research & Data Center shows that the plant produced only 20,000 vehicles last year, reaching only 13% of its planned capacity. Since production of the Volvo S60 sedan was discontinued at the plant a year ago, the plant currently produces only two pure electric crossovers: the Volvo EX90 and the Polestar 3.
In order to make full use of the capacity of the Ridgeville plant, Volvo Cars is considering producing a model with more sales at the plant, and the Volvo midsize XC60 hybrid crossover may be the first choice. In May, Volvo Cars CEO Hakan Samuelsson said: “We want to introduce a model that sells well as soon as possible, so the core midsize car is a good choice. ”