Volvo Group has announced plans to cut 4,400 jobs after reporting a 37% year-on-year fall in fourth quarter profits during 2013.
The 4,400 figure includes a previously announced structural reduction of 2,000 consultants and employees. The majority of the job losses are to take place during 2014, and will affect Volvo Group’s white-collar employees.
“The fourth quarter for the Volvo Group was characterised by a high activity level, with a number of product launches,” said president and CEO Olof Persson. “We have entered into 2014 with a new product portfolio that will strengthen the Group’s competitiveness.”
Volvo Group’s income during the fourth quarter of 2013 was $84mn, compared to $133mn during the same period of 2012 – a reduction of approximately 37%. This was despite the fact that the company’s net sales increased by around 8% during Q4 2013, rising from $10.8bn to $11.7bn year on year.
The Group launched a range of new products to the market during 2013, including the new Volvo Trucks range for Europe. Last month, Volvo also staged the MENA region’s biggest ever truck launch with the introduction of its new FH, FM, and FMX models.
Persson stated that extra costs associated with product renewals put pressure on the Volvo Group’s profitability, both during the fourth quarter of 2013 and throughout the rest of the year. Even so, the new product portfolio represents a key part of the manufacturer’s long-term strategy to strengthen its competitiveness, and the Volvo chief is confident that the company is now well positioned for the future.
“We have a further couple of quarters before we are through the industrialisation of the new generation of trucks and the phase-out of old generations,” Persson explained. “We can, however, already now see that the reception of the new generation of Volvo Trucks has exceeded our expectations and contributed to the Volvo brand increasing its market share in Europe to historically high levels.”
