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VOLVO

Volvo cuts thousands of white-collar jobs

Volvo on Friday announced it was cutting some 2,000 jobs as it unveiled third-quarter results showing a five-percent drop in group net sales.

Volvo cuts thousands of white-collar jobs

“As part of the previously announced Group-wide efficiency programme, a directional decision has been made to rationalize white collars in staff and support functions by approximately 2,000 employees and consultants,” the firm said in a statement.

The firm said third-quarter net sales fell to 64.9 billion kronor ($10.2 billion), a drop of five percent compared to the same period last year.

Net profits were also down one percent, to 1.4 billion kronor, well below analysts’ expectations for around two billion kronor.

Volvo boss Olof Persson said the firm’s third quarter “was characterzsed by the ongoing comprehensive product renewal in the group’s truck programme and the fact that we entered a new phase of the group’s development focused on taking actions to streamline and enhance the efficiency of our operations.”

The Volvo Group employs 112,000 worldwide, including 16,000 consultants and

temporary workers.

AFP/The Local/at

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VOLVO

Sweden’s Volvo regains strength after pandemic puts brakes on earnings

Swedish truck maker Volvo Group was hit by a sharp drop in earnings due to the coronavirus pandemic, but business rebounded at the end of the year.

Sweden's Volvo regains strength after pandemic puts brakes on earnings
Volvo Group CEO Martin Lundstedt. Photo: Adam Ihse/TT

In 2020, the group saw “dramatic fluctuations in demand” due to the Covid-19 pandemic, chief executive Martin Lundstedt said in a statement.

For 2021, Volvo raised its sales forecasts in its trucks division – its core business – in Europe, North America and Brazil.

However, it said it also expected “production disturbances and increased costs” due to a “strained” supply chain, noting a global shortage of semiconductors across industries.

The truck making sector is particularly sensitive to the global economic situation and is usually hard hit during crises.

In March, as the pandemic took hold around the world, Volvo suspended operations at most of its sites in 18 countries and halted production at Renault Trucks, which it owns, in Belgium and France.

Operations gradually resumed mid-year, but not enough to compensate for the drop in earnings.

With annual sales down 22 percent to 338 billion kronor (33.4 billion euros, $40 billion), the group posted a 46 percent plunge in net profit to 19.3 billion kronor (1.9 billion euros).

Operating margin fell from 11.5 to 8.1 percent.

However, the group did manage to cut costs by 20 percent.

“We have significantly improved our volume and cost flexibility, which were crucial factors behind our earnings resilience in 2020,” the group said.

Volvo's business regained strength in the second half of the year.

“Customer usage of trucks and machines increased when the Covid-19 restrictions were eased during the summer and this development continued during both the third and fourth quarters,” it said.

“Both the transport activity and the construction business are back at levels on par with the prior year in most markets.”

For the fourth quarter alone, the company reported a 38-percent rise in net profit from a year earlier.

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