Volvo announced it plans to cut 3,000 positions as President Trump’s tariffs continue to rattle the auto market.
The Sweden-based car company said in a release Monday that the move is part of its “cost and cash action plan” that is designed to build a stronger company as the industry faces “considerable challenges in its external environment.”
The release states that the layoffs will primarily affect office-based positions in Sweden, representing 15 percent of its global office-based workforce.
“These structural changes are necessary for Volvo Cars to deliver on its long-term strategy, strengthening its foundations for profitable growth,” the release states.
The company said the specific number of job reductions will be determined after it has finalized a review of its entire organization and determined a new structural set up. About 1,200 of the layoffs will be employee-held positions in Sweden, while 1,000 will be positions held by consultants, also mostly in Sweden.
The rest will happen in other markets.
“The actions announced today have been difficult decisions, but they are important steps as we build a stronger and even more resilient Volvo Cars,” Volvo Cars President and CEO Håkan Samuelsson said in the release. “The automotive industry is in the middle of a challenging period. To address this, we must improve our cash flow generation and structurally lower our costs.”
Trump announced earlier this month he would scale back his planned 25 percent tariffs on imported automobiles and auto parts. The executive orders Trump signed spare auto parts from facing both those tariffs and the ones Trump had already implemented on foreign metals.
The parts instead face the higher available rate per product.
The administration is also allowing automakers to apply for 15 percent price offsets during the first year of the tariffs and a 10 percent offset during the second year to try to get companies to increase domestic production. The reductions will be phased out by the third year.
United Auto Workers has declared support for Trump’s auto tariffs to protect workers and U.S. industry, but the tariffs have added to financial difficulties facing auto companies, which already have been facing high costs.
