Volvo plans downsize
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[06/25/2008] Volvo on Thursday announced job cuts as part of the manufacturer's extensive cost reduction programme.
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Volvo on Thursday announced job cuts as part of the manufacturer's extensive cost reduction programme.
Volvo Car Corporation plans to reduce its workforce by 2 000 employees, 300 of which will be in its operations outside of Sweden.
However, Volvo Cars South Africa has informed Wheels24 that no South Africans will be affected by the job cuts.
Negative currency effects, influenced by a weak US dollar, and the increasing cost of raw materials have for a long time had a significant impact on Volvo Cars' financial situation, the company said in a statement.
This had previously been balanced with cost reduction and efficiency programmes.
But a declining US market, continued raw material price increases and weaker market conditions in Europe saw the situation deteriorate further.
"This is an unfortunate but necessary action if we are to achieve a better financial position", said Fredrik Arp, president and CEO of Volvo Car Corporation.
"We must tackle the difficult conditions, most of all in the US market. The market contribution to cover Volvo Cars' costs is very small", Arp concluded.
The staff reductions are part of the latest cost-cutting exercise, which, it is estimated, will save the company US$ 700 million.
The review of the Volvo Cars Corporation organisational structure will be phased in and should be complete by the end of the year.
Volvo Car Corporation plans to reduce its workforce by 2 000 employees, 300 of which will be in its operations outside of Sweden.
However, Volvo Cars South Africa has informed Wheels24 that no South Africans will be affected by the job cuts.
Negative currency effects, influenced by a weak US dollar, and the increasing cost of raw materials have for a long time had a significant impact on Volvo Cars' financial situation, the company said in a statement.
This had previously been balanced with cost reduction and efficiency programmes.
But a declining US market, continued raw material price increases and weaker market conditions in Europe saw the situation deteriorate further.
"This is an unfortunate but necessary action if we are to achieve a better financial position", said Fredrik Arp, president and CEO of Volvo Car Corporation.
"We must tackle the difficult conditions, most of all in the US market. The market contribution to cover Volvo Cars' costs is very small", Arp concluded.
The staff reductions are part of the latest cost-cutting exercise, which, it is estimated, will save the company US$ 700 million.
The review of the Volvo Cars Corporation organisational structure will be phased in and should be complete by the end of the year.
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