Volvo Cars announced on Wednesday that due to changes in market conditions and adjustments in trade policies, including tariffs, the production plans at its Charleston plant in South Carolina, U.S., will be modified. As a result, the company will lay off 5% of its approximately 2500 employees.
According to a report by Reuters, the company stated in a press release that these layoffs are separate from the previously announced plans to reduce costs by 18 billion Swedish Krona (approximately 1.8 billion U.S. dollars) following the first-quarter financial report. It remains unclear which specific positions will be affected by the layoffs and how it will impact the production at the Charleston plant.
Despite these changes, Volvo emphasized that the United States remains a crucial part of its long-term strategy, with a focus on optimizing its product lineup and manufacturing operations in the country while still aiming to create 4,000 employment opportunities in South Carolina.
Additionally, the company noted its plans to expand production capacity at the Charleston plant in the future.
Hakan Samuelsson, the newly appointed CEO of Volvo Cars, stated in April that the company would increase car production in the U.S. and enhance regional efforts.
The Charleston plant currently has an annual production capacity of 150,000 vehicles, where Volvo produces the more expensive electric SUV, the Volvo EX90, and the Polestar 3, while the lower-priced model, the Volvo EX30, is scheduled to begin production in Europe soon.
Acquired by Zhejiang Geely Holding Group in 2010, Volvo Cars has faced significant challenges due to the global tariffs imposed by former U.S. President Trump.
Despite having its largest factory in Sweden, Volvo Cars also operates four large plants in China located in Chengdu, Daqing, Taizhou, and Hangzhou.
Based on Volvo Cars’ 2024 annual report, the company has a global workforce of nearly 43,000 employees, with 29,000 in Europe, approximately 10,000 in Asia, and 3,000 in the Americas.