Volvo Cars laying off 1,300 as it steps up cost cuts

Volvo Cars will lay off around 1,300 office-based employees in Sweden as it steps up cost cutting, the Sweden-based automaker said on Thursday.

While an earlier efficiency drive had begun to show results, with Volvo this week reporting a strong first quarter, more efficiency was needed, CEO Jim Rowan said in a statement.

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

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

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

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

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.

Volvo Cars shares were down 3.87% at 0848 GMT.