Volvo to cut 4,400 jobs in 2014

STOCKHOLM (AP) — Truck maker AB Volvo said it plans to
lay off 4,400 employees this year as it revealed a 37 percent slide in
fourth quarter profits.
Volvo CEO Olof Persson said the job
losses, which include the previously announced reduction of 2,000, will
affect employees worldwide in group truck operations, as well as in
technology, sales, marketing, IT, finance and human resource
Persson said the cuts will help Volvo use its
resources more effectively and are a consequence of the company’s
transformation. The reductions will start immediately and are expected
to be largely completed during 2014.
The job losses came as the
company reported net profit of 548 million kronor ($84 million), down
from 869 million kronor a year earlier. The fall was largely due to the
extra costs involved in updating its trucks.
The profits decline
came despite an 8 percent rise in sales to 76.6 billion kronor and a 15
percent increase in truck deliveries to slightly more than 61,000
trucks. The pick-up 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.
"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
said. "We can, however, already now see that the reception of the new
generation of Volvo Trucks has exceeded our expectations and contributed
to the Volvo brand increasing its market share in Europe to
historically high levels."
Despite the profit decline, the company maintained its dividend at 3 kronor per share.
Shares in Volvo rose by 4.9 percent to 89.7 kronor in early trading on the Stockholm stock exchange.
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