Volvo Buses, a subsidiary of the Swedish automaker Volvo Group, announced an extensive restructuring initiative in Europe on Thursday, resulting in the elimination of up to 1,600 positions.
The restructuring, which will be implemented over the course of 2020, is designed to improve the competitiveness of Volvo Buses’ operations in Europe. The company noted that the changes will affect both production and administrative staff, with the majority of the layoffs taking place in Sweden.
In a statement, Volvo Buses’ President Håkan Agnevall said that the company is “tackling the challenges of the current market situation head-on.” He explained that the restructuring is necessary in order to “secure the future of the company and its European operations.”
Agnevall added that the decision was “not taken lightly,” and that the company will be providing “extensive support” to those affected by the restructuring.
The restructuring initiative is part of a broader effort by Volvo Group to focus on its core operations and strengthen its presence in the European market. The company is aiming to increase its efficiency and profitability by simplifying its operations and reducing costs.
The cuts come in the wake of several other restructuring initiatives implemented by Volvo Group in 2019, including the closure of several production sites in the U.S. and Europe. The company has also announced plans to reduce its workforce in other regions, including China and South America.
The implementation of the restructuring plan is expected to result in a one-time cost of approximately SEK 2 billion (US$205 million). It is expected to generate annual cost savings of SEK 0.7-1.0 billion (US$71-102 million) starting in 2021.
In a tweet, Reuters reported that Volvo Buses is “restructuring in Europe, hitting 1,600 jobs.” The company’s statement noted that the restructuring is expected to create a “more competitive and cost-efficient production structure” and “a stronger presence in the European market.”