Swedish battery maker Northvolt has announced plans to cut 1,600 jobs in Sweden as part of a significant cost-cutting effort aimed at focusing on large-scale cell manufacturing.
The layoffs, which amount to 25% of the company’s workforce in Sweden, come as Northvolt undergoes a strategic review in response to a challenging economic environment.
The job cuts will primarily impact the company’s factory in Skellefteå, in northern Sweden, where 1,000 positions will be eliminated. The remaining layoffs will affect research and development roles near Stockholm and corporate support staff. Northvolt stated that all redundancies are subject to ongoing union negotiations.
The company, which produces lithium-ion batteries for the electric vehicle industry, attributed the layoffs to the need to prioritize its core operations and accelerate production at its flagship gigafactory, Northvolt Ett. This move also includes suspending the planned expansion of the Skellefteå site, which was set to add 30 gigawatt hours of annual production capacity.
Peter Carlsson, Northvolt’s CEO and co-founder, emphasized the need for the company to adapt to the economic headwinds facing the automotive sector and the broader industrial climate.
“While overall momentum for electrification remains strong, we need to make sure that we take the right actions at the right time,” Carlsson said.
Northvolt, one of Europe’s most prominent privately-held tech companies, has faced mounting financial pressure due to a slowdown in the electric vehicle market, new trade tariffs, and increased competition from lower-cost Chinese manufacturers. The company has also seen key customers, such as BMW, cancel large battery orders, forcing it to reassess its growth strategy.
Despite these challenges, Northvolt has secured over $55 billion in orders from major automakers, including Volkswagen, Volvo, and Scania. The company plans to focus on fulfilling its existing commitments while slowing down expansion efforts at its other sites in Sweden, Germany, and Canada.
CNBC, Financial Times, and Market Watch contributed to this report.
