In total, the company’s cutbacks entail a workforce reduction of about 200 employees.

The notices of layoffs issued in June are partly the result of the aviation industry recession, which has hit the world’s airlines with major losses, and in turn has impacted the demand for new aircraft and spare parts. Another key reason is that Volvo Aero’s expenses have increased in recent years, without a corresponding rise in the company’s sales.

“I deeply regret that the company must lay off employees, but we have no other choice. Costs must be reduced to remain competitive. Otherwise, the future is very bleak,” explains Volvo Aero President Staffan Zackrisson.

At the same time, Volvo is grateful for being able to reduce the number of layoffs from the original 160 to 36. This was the result of 23 employees accepting offers of early retirement and 56 white-collar employees have stated that they are leaving the company and they will not be replaced. The same applies to the eight employees retiring in 2010.

In addition to this, the company will also reduce the number of consultants by 50% from 119 to about 45at the end of 2010.

This is the second round of layoffs at Volvo Aero this year. In January, 250 blue-collar employees were issued noticed of layoffs and in April, 220 of those were laid off.

November 3, 2009

For more information, please contact Fredrik Fryklund, head of Corporate Communications, Volvo Aero, +46 703 1923 96.