Volvo reviews staffing levels

Swedish manufacturer Volvo is looking to shed jobs across all six of its divisions in an attempt to lift operating margins in the face of weakening demand.

The company, which last month announced a 27 per cent decline in nine-month profits, confirmed senior managers in its six divisions, which include Volvo cars, trucks, buses and construction, had been asked to submit cost-cutting recommendations as part of a wide-ranging review.

Senior vice president Klas Magnusson, speaking on behalf of Volvo Construction Equipment said: "We are looking into our head count like all other Volvo companies." The review of staffing levels covers every aspect of the construction business including operations in the UK. According to Magnusson it will take a couple of weeks to complete.

Anticipating a global downturn in construction equipment sales in 1999 the company has already shed 165 staff at its excavator production plant in Eslov, Sweden. According to Magnusson the cutbacks, that began in the Summer, affected both "blue and white collar workers."

So far, no jobs have been axed at the company's four other construction equipment factories in Sweden, but the current review could change that. Recent reports indicate as many as 2000 white collar jobs will be shed from Volvo's Swedish operations.

Following the recent acquisition of Samsung's excavator plant in Korea, production workers at Eslov are still awaiting news of Volvo's plans for future excavator production. The question is whether all or some of the production process will be moved to Korea. This too could lead to more job cuts in Sweden.