Reduction of number of employees and consultants by 2,000
Against the background of the previously announced efficiency enhancements within staff and support functions, the Volvo Group has made a directional decision to globally reduce the number of employees and consultants within these functions by 2,000. The measure is part of the recently communicated Group-wide efficiency program and will be implemented during 2014.
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In the months ahead, detailed work will commence to establish how the reduction in the number of employees will impact the various staff and support functions, including Group Business Services (GBS) and Volvo IT.
The numerous acquisitions implemented in the past decade have resulted in a gradual expansion of staff and support functions in the Volvo Group. The companies acquired by the Group have been incorporated into the Group more or less intact. As previously announced, the Volvo Group conducted a mapping of the staff and support functions in spring 2013 to examine in detail the number of employees working in these functions and their locations. At the same time, a benchmark was done with other major companies and the result showed that the Volvo Group has significantly more employees in staff and support functions than the external benchmarks.
“We have created a functional and process-oriented organization to enhance efficiency and thus achieve higher profitability,” says President and CEO Olof Persson. “Improved profitability is necessary in order to afford to develop attractive products that are more competitive and will also provide us with continued growth potential.”
By making the staff and support functions smaller and designed for new ways of working, with clear roles and responsibilities, the functions will become more efficient.
The targets included in the new strategies for the truck operation and other business areas for the 2013-2015 period are clearly focused on increasing the Group’s efficiency and profitability. Since January this year, intense work has been in progress to identify various measures that contribute to the Group achieving its strategic targets. In September, the Group decided to combine a number of these measures into a Group-wide efficiency program, and the cutbacks in administrative employees in the staff and support functions are part of this program.
The cutbacks in the staff and support functions will be subject to trade union negotiations. The results of these negotiations will be announced in the coming months.