Owing to a slowdown in demand, Volvo Group will cut an additional 850 jobs in its machine and construction manufacturing subsidiary, the company said on Oct. 23. "The weakening of the market which started in North America during last year and was later spread to Europe has now developed into a global slow down in the construction equipment market," the company said.
The move will only affect Swedish employees and follows a similar announcement made earlier this autumn that 500 people would lose their jobs. Volvo's machine and construction equipment arm currently employs 17,000 people, a company spokesman said.
"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 Rosen, an executive for Volvo Construction Equipment.
Volvo employs more than 100,000 people worldwide and operates in more than 180 markets. It will publish its third quarterly results Friday morning. The company posted a net profit of 5.1 billion kronor (US$ 700 million) in the second quarter of 2008, an increase of 28% from the same period in 2007.
The Volvo Group builds commercial vehicles such as trucks, buses and construction equipment, as well as components for marine, industrial and aerospace sectors. It no longer owns the Volvo Cars brand, which it sold to Ford Motor Company in 1999.
Last month, the group's Volvo Trucks subsidiary said it would cut 1,400 jobs at its plants Belgium and Sweden.
Copyright Agence France-Presse, 2008