Volvo Trucks to layoff 2000 employees image

Volvo AB will cut 2,000 administrative jobs, or 1.8% of its workforce, after investments in new models and a rising currency caused a surprise fall in third-quarter profit at the Swedish truck maker.

Earnings before interest and taxes went down 18% to 2.4 billion kronor ($380 million) from 2.92 billion kronor a year earlier, Gothenburg-based Volvo said in a statement today. The job eliminations are part of a strategy that Volvo, the world’s second-biggest truck maker, announced in September to reach annual cost savings of 4 billion kronor through 2015. Volvo reported a 7.5 % rise in third-quarter truck orders, which is a modest rise compared a 29 percent increase at local competitor Scania AB and 33 % at industry leader Daimler AG.

The truckmaker, which also makes Renault-brand trucks in Europe, Mack vehicles in North America and UD models in Japan, had an employee base of 112,644 people at the end of September, including 17,216 temporary employees and consultants, the company disclosed in its earnings report. The job cuts will be spread among employees at the group’s main locations in the US, Sweden, France and Japan, said Karin Wik, a spokeswoman.

Volvo also announced on Oct. 16 a capacity production decrease, which involves shifting production among plants in different countries in a project that would cut another 900 jobs, including 700 in Sweden. Volvo hasn’t specified whether those workers will be laid off or transferred.

Via Bloomberg