Northvolt to cut 1,600 jobs in Sweden
The Swedish battery manufacturer has been struggling for some time now. Earlier in September Northvolt announced that it would streamline its operations, focusing on large-scale cell manufacturing whilst reducing costs – something that would entail redundancies. Now, the numbers are in.
Following initial steps taken as part of its strategic review, Northvolt now outlines a revised scope of operations focused on boosting production in large-scale cell manufacture at Northvolt Ett.
These steps are expected to result in the redundancy of roughly 1,600 Northvolt workers spread across Skellefteå (1,000), Västerås (400), and Stockholm (200). All redundancies are the subject of ongoing union negotiations, the company disclosed in a press release.
In adjusting its near-term ambitions and focusing on the ramp-up of the first 16 GWh phase of Northvolt Ett, Northvolt positions itself to prioritise commitments to its current automotive customers.
“While overall momentum for electrification remains strong, we need to make sure that we take the right actions at the right time in response to headwinds in the automotive market, and wider industrial climate. We now need to focus all energy and investments into our core business. Success in the ramp-up of production at Northvolt Ett is critical for delivering to our customers and enabling sustainable business operations,” Northvolt CEO Peter Carlsson, CEO says.
What does this mean in practical terms?
The Northvolt Ett extension project in Skellefteå, Sweden, will be suspended. The building project was planned to add 30 GWh of yearly cell manufacturing capacity. This move follows the decision to place the Northvolt Ett cathode active material factory into care and maintenance.
Northvolt Labs in Västerås, Sweden, will cut down its programs and expansion. Northvolt Labs' core platforms will be maintained, which according to the press release will enable Northvolt Labs to "retain its position as Europe’s leading campus for battery innovation and product development."
As the company reduces the scope of its operations and programs in Sweden, Northvolt will also reduce the size of its corporate support functions, which today are largely located in Stockholm.
Rescoping operations is described as crucial to ensure a sustainable operating and cost base. To reach this, a workforce reduction of around 20% on a global scale and 25% in Sweden is said to be necessary. Northvolt is currently in discussions with its union representatives about the applicable processes and the road forward.
“The decisions announced today are both challenging and painful. I and all my colleagues at Northvolt will do everything we can to support the colleagues who will eventually leave the company. The decisions are, however, necessary to adjust for current realities and enable the long-term success of Northvolt,” Peter Carlsson concludes.
