Volvo Cars Unit Novo Energy To Cut 50% Jobs To Reduce Cost, Re-size Operations

(RTTNews) - NOVO Energy, the battery unit of Swedish luxury car maker Volvo Car AB (VLVOF, VOLCAR-B.ST), announced Monday around 50 percent reduction in its workforce, as part of its actions to reduce cost and organizational changes to re-size its operations.

These developments come after extensive evaluation of its business following the bankruptcy of Northvolt, its technology partner.

The company said the latest actions will result in a workforce reduction affecting around 50% of NOVO Energy's employees. This is in addition to the cost reduction efforts announced in January. All notices of redundancies are subject to ongoing union negotiations in Sweden.

NOVO Energy will continue limited operations while finalizing the first phase of construction and continuing to explore potential future scenarios that could permit a resumption of activities at scale.

Producing batteries, with a new technology partner, in the Gothenburg area remains the primary long-term objective for NOVO Energy.

Adrian Clarke, Chief Executive Officer of NOVO Energy, said, "Despite our best efforts to secure our business and an extensive ongoing search for a suitable new technology partner, the current economic challenges and market conditions have made it impossible to maintain our operations at the current scale. This was an incredibly hard decision to make, and it was not made lightly."

In Stockholm, Volvo Car shares were trading at 17.43 Swedish Kronor, down 0.74 percent.