Volvo to Lay Off 400 Temporary Consultants image

Volvo announced it will lay off 400 temporary consultants and that it has offered an ultimatum to its Swedish suppliers to cut prices by a fifth by 2015.

Volvo, which was acquired by Geely in 2010, announced the reduction of technical consultant positions is necessary for the completion of work on updating its car models.

“By using highly-skilled technical consultants in our engineering operations we have the flexibility to tailor the workforce to short-term needs in our car projects,” said Peter Mertens, senior vice president, Research and Development at Volvo Car Corporation.

The automaker is also relying on suppliers to cut costs, as Axel Maschka, the purchasing director for the firm told about 400 suppliers in Sweden to cut costs by 20% if they want to take part in Volvo’s expansion plan to produce 800,000 cars in 2020. Last year Volvo sold 449,000 cars, half of them in Europe. The automaker plans to quadruple the 47,000 units sold in China to 200,000.

“We are planning to buy about 25 per cent from Chinese suppliers. We will reinforce our cooperation with Geely over our purchases in China,” said Axel Maschka.