Volvo has cancelled 500 consultancy contracts and cut 1400 jobs in a bid to cut costs
25 June 2008

Volvo is laying off 2000 of its Swedish staff and cancelling 500 consultancy contracts, the company has announced.The job losses are part of a cost-cutting move that will fuel speculation that Ford is poised to sell the company. Most of the Volvo employees made redundant will be white-collar workers, but 600 blue-collar workers on the third shift at Volvo's Torslanda plant (where the V70 and XC90 are built) will also lose their jobs, along with a further 300 people worldwide.Volvo gave the Swedish government official notice of its plans today and intends to restructure its workforce before the end of the year. "Volvo Cars is implementing a cost-reduction programme which is estimated to reduce the total cost level by about $700 million," said Volvo. "This is an unfortunate but necessary action if we are to achieve a better financial position," said chief executive Fredrik Arp, citing the declining US market as a key reason for the cut-backs. Reports suggest that Ford has entered into preliminary negotiations with a Chinese company, believed to be Shanghai Automotive Industry Corporation (SAIC), that is interested in buying the ailing car maker, and a Russian investor is also believed to want Ford's luxury wing.Industry rumours have suggested that BMW and Mazda are other potentially interested parties. But a Ford spokesman said: "We are focused on improving Volvo's business results."However, Ford's new major shareholder Kirk Kerkorian, who now has a 6.49 percent stake in the company, recently indicated that he would like to see the cash-strapped US giant part ways with Volvo.

Will Powell

Our Verdict

Volvo XC90 2003-2014

The Volvo XC90 is a big seven seat SUV in desperate need of modernisation, despite still having some strengths

Join the debate


26 June 2008

Its sad news really, but if it helps keep Volvo going then good. I think Ford would be crazy to sell Volvo though. It has been an under developed brand, and with a little investment, it could be were Audi should be, ie comfortable quailty cars that arent out to be sporty in an attempt to outdo BMW

26 June 2008

Oh dear. I thought Volvo actually made a profit?

28 June 2008

All set for a sale...

Considering all recent rumors and hints, I would be seriously surprised if Volvo isn't out of the Ford stable by year-end.

To my opinion, considering Ford's condition - it's for the best.

Add your comment

Log in or register to post comments

Find an Autocar car review

Driven this week

  • First Drive
    21 March 2018
    The new Vantage has been developed as a Porsche 911 beater, and our first taste on UK roads suggests it can live up to that bold claim
  • Nissan Leaf Tekna
    The is the new Nissan Leaf
    First Drive
    21 March 2018
    The new version of the world's best-selling electric car gains a bigger battery and more power. How does it compare to rivals such as the Volkswagen e-Golf?
  • Range Rover p400e
    First Drive
    20 March 2018
    The original luxury SUV is now available as a plug-in hybrid, promising lower emissions and the capacity for silent electric motoring
  • BMW i3s
    Car review
    20 March 2018
    Revised hatchback sets out its range-extended electric stall in a new, sportier tune
  • BMW X2
    This is the new BMW X2
    First Drive
    20 March 2018
    Doesn’t deliver many typical crossover selling points but looks perky, handles keenly and is well capable of winning over your latent cynic