Volvo Construction Equipment last week announced that it gave an additional 850 employees in Sweden a notice of redundancy. Earlier this fall, the company announced a notice of redundancy to 500 employees in Sweden. The redundancy notice serves as a warning to employees that downsizing is necessary. The number of employees released and the timeframe for the reductions will now be negotiated and decided through discussions with the unions, Volvo CE said.
The downsizing is necessary due to the slowdown of the global construction equipment market.
The weakening of the market, which started in North America during last year and later spread to Europe, has now developed into a global slowdown in the construction equipment market. The global financial crisis has further accelerated the weakening of the business cycle.
“The actions we are taking now are needed in order to adjust production capacity to declining demand and to ensure that the company is coming out stronger from this downturn,” said Yngve Rosén, president of hauler loader business line for Volvo CE.
The company estimates that out of the additional 850 employees that have now been given notice within Volvo CE in Sweden, approximately 10 percent are white collar workers and the rest are blue collar workers.
All Volvo CE’s locations in Sweden are affected. The distribution in the number of redundancies of blue collar workers is indicative as follows: Arvika 200, Braås 200, Eskilstuna 200 and Hallsberg 150. Distribution in the number of redundancies of white collar workers per each location is not yet decided.
Negotiations with the unions started immediately.
Volvo Construction Equipment is a major international company developing, manufacturing and marketing equipment for construction and related industries. Its products include a comprehensive range of wheel loaders, hydraulic excavators, articulated haulers, motor graders and compact equipment.