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Volvo Cars to cut six percent of its Swedish workforce

Chinese-owned Volvo Cars of Sweden announced on Thursday that it would cut 1,300 white-collar positions in Sweden in an effort to cut costs and warned that global cost-cutting measures were on the horizon.

Published: 4 May 2023 15:27 CEST

Volvo Cars to cut six percent of its Swedish workforce

Photo: Joakim Ståhl/SvD/TT

CEO Jim Rowan said in a statement that cost-cutting measures taken last year had started to “bear results” but “it’s clear that we need to do more.”

“Economic headwinds, increased raw material prices and increased competition are likely to remain a challenge to our industry for some time,” he said.

The office job cuts represent around six percent of its employees in Sweden, the company said.

While Thursday’s announcement concerns only Sweden, the company said it “will reduce costs and drive efficiencies across its global operations over the coming months.”

In late April, the carmaker reported a drop in first-quarter profits — despite higher sales — and said it was “evaluating the need for further targeted cost actions.”

It had reported a 10 percent increase in vehicles sold to some 162,900, and a 29 percent increase in revenue to 95.7 billion kronor ($9.3 billion).

But the company’s net profit fell to 3.98 billion kronor from 4.5 billion a year earlier.

The carmaker, which aims to become 100 percent electric by 2030, also said that one in five cars sold in the first quarter had been electric.

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Taxes, schools and housing: Three reasons Spotify staff may reject Sweden

High taxes on share payouts, low-quality schools and Stockholm’s housing shortage are the main factors making it harder for Spotify to recruit foreign talent to Sweden, the streaming giant’s HR boss, Katarina Berg, told Swedish news agency TT in an interview.

She called it a “skills exodus” which pushes not only foreign workers, but even Swedes to move abroad.

Stockholm remains the company’s HQ, but today it employs more people in New York, where there’s a greater pool of skilled engineers, Berg said. Engineers make up around 50 percent of Spotify staff, and Sweden’s homegrown talent isn’t enough to fill those positions.

Almost half of Spotify’s Sweden-based staff are foreigners from 76 countries around the world, with the top nationalities being Brazil, the UK, the US, India, France, Russia, Iran, Italy, Spain and Germany.

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One of the perks that Spotify uses to attract people to the company is a share-based rewards programme that employees can take part in. But Berg said that Sweden’s high taxes on stock incentive plans cancel out a lot of the benefits that such a scheme offers.

“Depending on where in the world you work, you could get taxed 17 percent, 33 percent – or 56 percent, like in Sweden. Of course that could determine where an employee wants to work. You don’t choose Sweden then,” she said.

The housing shortage and lack of elite schools, in particular senior high schools, are also key factors, Berg argued.

“We get a lot of families who come here. They settle down. They want to stay here. They like the Swedish philosophy, with quite a lot of parental leave, another type of holidays and balance in life. But then when their children get so big that they need their grades to apply to a university somewhere, perhaps a US college, our Swedish schools are not up to scratch,” she said.

What are the positives and negatives about working in Sweden? Let us know in the comments.

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