Just days after news broke that Volkswagen is set to lay off 30,000 employees in Germany, another car company is about to implement a massive round of layoffs.
Northvolt, which is trying to make a living building batteries for electric vehicles, has made another tough decision. Attracting new capital to the struggling company has proved more than difficult. At the same time, costs have spiraled out of control, and production at the Skellefteå factory is lagging.
As a consequence, Northvolt has announced a comprehensive cost-saving plan that will result in the dismissal of 1,600 employees in Sweden. The company will lay off staff in Skellefteå, Västerås, and Stockholm, where 1,000, 400, and 200 positions will be eliminated, respectively. Furthermore, the expansion of the Skellefteå factory has been put on hold.
According to Northvolt, the purpose of the cost-cutting measure is to concentrate efforts on the production of battery cells in Skellefteå. The company highlights that it has managed to triple production at this facility, which had previously been a significant concern.
"Although the overall momentum for electrification remains strong, we need to ensure that we make the right decisions at the right times in response to the headwinds the automotive industry is facing," says Peter Carlsson, CEO of Northvolt, in a press release.
"We now need to focus all energy and investments on our core business. Success in increasing production at Northvolt Ett is crucial to delivering to our customers and enabling sustainable business. The recent production records at Northvolt Ett show that we are on the right track, but the decisions we make today, no matter how hard they are, are necessary for Northvolt's future."
The consequences of the cost-cutting measure are grim. Northvolt is now set to lay off one in four employees in Sweden. The crisis in the company comes after, among other things, deaths at the Skellefteå factory and the tearing up of a contract with BMW worth several billion dollars.
