Volvo cuts 1,000 more jobs in wake of withdrawn orders for trucks

| 11/12/2008

Officials with Volvo announced the company is cutting almost 1,000 more jobs on top of the 1,400 layoffs it had already announced this fall.

About 900 of the new round of cuts will be in Sweden at the company’s powertrain unit, according to The Associated Press. Another 65 workers at the Volvo powertrain plant in Hagerstown, MD, will also be laid off. The unit makes engines, gear boxes and rear axles for trucks. A company spokesman told The AP that a number of consultants in Sweden could also lose their jobs.

Volvo officials have also amended their forecast for North American truck sales this year, switching from a prediction of “flat” sales to a forecast of sales being down by 10 percent.

MarketWatch reported in recent weeks that Volvo posted a 36 percent drop in third quarter profits this year compared to 2007 and that company officials had said that sales growth decelerated much faster than they had expected.

“The financial turmoil and credit tightening has led to a very cautious approach among customers when it comes to deciding on investing in new trucks,” the company officials statement.

According to MarketWatch, Volvo’s net order intake in Europe amounted to only 115 trucks, down from 41,970 trucks, as customers withdrew orders.