STOCKHOLM (Reuters) - Truck maker Volvo’s construction equipment unit plans to cut 450 jobs in Sweden due to lagging profitability and an unfavourable product mix, its European head of production said on Thursday.
Jorgen Svenningsson said the company hoped to be able to solve the issue on a voluntary basis and that none of the employees had been given notice. He made the comments after local media reported the unit was looking to cut 165 staff.
“We need to do this due to the need for productivity improvements,” Svenningsson told Reuters.
“There is an unfortunate product mix since the big machines, which are produced in Sweden, stand pretty still in the market, while the smaller machines, made down in Europe, are developing somewhat better,” he added.
Svenningsson said the company would offer severance pay and pensions to some of its employees.
“We hope to solve it that way, but if not, redundancies cannot be ruled out,” he said.
Volvo CE, which makes excavators and wheel loaders, currently has around 4.500 employees in Europe.
The Volvo group said in February it planned to cut a total of 4,400 jobs in a move that would involve staff also in its trucks business and in areas such as sales and marketing.
Reporting by Helena Soderpalm; editing by Niklas Pollard