Volvo announces job cuts, restructuring worth Rs 4,839cr
Swedish automaker Volvo has announced a 5 billion kronor (Rs 4,839 crore) restructuring plan, which will include job cuts, to be carried out over a two-year period. The world's second largest commercial vehicle manufacturer stated that the restructuring is likely to result in an annual savings of 4 billion kronor (Rs 3,871 crore), effective end of 2015.
"The programme encompasses both reduction of white collar employees and consultants and efficiency enhancements in the global industrial system," the company wrote in a statement. The company, however, has not revealed how many employees will be cut down.
The company stated that the decision was made after the results in 2012 and the first quarter of this year turned out to be lower than expected. Owing to the economic slowdown in Europe and China, Volvo's operating profit declined by 58 per cent to around 3.8 billion kronor (Rs 3,700 crore) in the second quarter. Volvo had also partnered with Chinese manufacturer Dongfeng in early 2013 to take on Daimler in the fight to become the top commercial vehicle manufacturer globally.
Volvo Group currently employs 1,12,000 people across its global operations, including 16,000 consultants and temporary workers. The organisation has hinted that this restructuring is mainly going to be concerned with its lorry business.
