Volvo truck profits slide, layoffs announced
A 37 percent slide in fourth quarter profits will prompt Swedish truck-maker AB Volvo to lay off 4,400 employees this year, the company announced Thursday.
Volvo CEO Olof Persson said the job losses, which include a previously announced reduction of 2,000, will affect employees worldwide in group truck operations, technology, sales, marketing, IT, finance and human resources.
Citing the cost of updating its trucks, the company reported net profit of $84 million Thursday, down from nearly $134 million a year earlier.
The profits decline came despite an 8 percent rise in sales and a 15 percent increase in truck deliveries to slightly more than 61,000 trucks. Volvo says the up-tick in deliveries was driven by demand in North America and Brazil, as well as acquisitions in Europe ahead of the transition to tougher emission regulations.
When it comes to the truck, we have seen good volumes in the quarter, we have seen also encouraging movements in the market shares in many of the markets,” Persson says. “We have a further couple of quarters before we are through the industrialization of the new generation of trucks and the phase-out of the old generations.
Persson says Volvo can already see reception of the new generation of Volvo Trucks has exceeded expectations and contributed to the Volvo brand increasing its market share in Europe to “historically high levels.”
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