Volvo plans to cut 1,000 jobs to reduce costs
STOCKHOLM (Reuters) -- Volvo Cars will cut 1,000 more jobs and save more than $200 million to reach breakeven this year after its vehicle sales and Chinese growth have lagged.
Volvo last year cut the number of temporary contract staff on the workfloor. The new cuts will be on the consultant and white-collar side, CEO Hakan Samuelsson said on Wednesday. "One has to adapt to reality. We have done that on the factory floor side, now we have to do it on the white-collar side," he told SVT public television.
Spokesman Per-Ake Froberg said Volvo expected to cut about 750 consultant jobs and make the other reductions by voluntary moves from permanent staff, such as early retirement. "We plan to save 1.5 billion crowns ($237.2 million) during the course of the year to reach a goal of breakeven," he said.
Last year, Volvo cut about 900 jobs. The company has around 22,000 permanent staff, including about 14,000 in Sweden and nearly 4,000 in Belgium.
Recession in Europe and slowing sales in China pushed Volvo's 2012 sales down to 421,951 cars from 449,255 in 2011 and caused a first-half loss.
Volvo aims to spend about $11 billion to reach 800,000 in sales by 2020 and boost China to 200,000 from only 41,000 last year, itself a drop of 10.9 percent. The U.S. market remained the single biggest at 67,273 last year, up 1.2 percent.
Aside from falling sales, internal disagreements led to the ouster of Stefan Jacoby as chief executive last year and to Samuelsson's appointment.
Volvo expects a new plant in Chengdu in China, a key part of the company's expansion plan, to open in the second half.