According to Volvo Group (Volvo), the COVID-19 crisis is expected to have a negative effect on economic activity in many of the company’s major markets in the short and medium term. As the next step, Volvo plans to further reduce its white-collar workforce globally by approximately 4,100 positions during the second half of 2020.
“The coronavirus pandemic and the global measures taken to fight it has led to a market situation impacting our industry severely,” said Martin Lundstedt, president and CEO of the Volvo Group. “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.”
Since mid-2019, the Volvo Group has adjusted its activity levels by using the installed flexibility, terminating temporary and consultant contracts. The need for staff reductions would have been higher without various governmental support packages enabling short-term layoffs and other similar measures.
According to Volvo, the staff reductions will be carried out in different ways across the company, depending on the local business situation, country legislation and labor market practices. In some countries, including Sweden, the planned measures include notices of redundancy.
“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,” said Lundstedt. “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.”