Volvo axes 1,300 jobs as it steps up cost cuts

Volvo will lay off around 1,300 office-based employees in Sweden as it steps up its cost cutting.

While the group's efficiency drive had begun to show results, more was needed, CEO Jim Rowan said in a statement on Thursday.

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

About 1,100 jobs will be cut at Volvo's main global operating unit, Volvo Personvagnar, while the remaining 200 positions will be identified after a review of the company's entities across Sweden, the company said.

The 1,300 positions equate to 6 percent of Volvo Cars' workforce in Sweden.

Rowan said Volvo did not yet know how much it would save from the new measures. "We are still working the details through on that," he told Reuters in an interview.

The company said it had issued lay off notices for 1,100 employees, while the remaining 200 white-collar positions would be identified following a review of the business across Sweden.

Global cuts

It said it also expected to cut jobs and reduce costs across its global operations in the coming months, including its consultancies.

Rowan said he could not yet specify where those jobs would be cut, but that focus would primarily remain on office-based positions.

"We sell in over 80 countries or so worldwide, so I think there's opportunities for us to become more efficient across the entire network," he told Reuters.