Battery giant Northvolt to cut 25% of workforce in Sweden as part of a major cost-cutting drive

Battery maker Northvolt on Monday announced plans to cut a total of 1,600 jobs in Sweden as part of a major cost-cutting drive.

In an update published via its website, Northvolt said that following initial steps taken as part of a strategic review, the company had revised its scope of operations in Sweden “to ensure that its resources are focused on accelerating production in large-scale cell manufacturing at Northvolt Ett.”

The strategic action requires Northvolt to reduce its global workforce by around 20% and a 25% reduction in Sweden, the firm said.

It added that these measures were expected to result in the redundancy of roughly 1,600 employees, including 1,000 positions at its factory in Skellefteå in the north of the country. The company said all redundancies would be subject to ongoing union negotiations.

Northvolt, which currently delivers batteries from its first gigafactory Northvolt Ett in Skellefteå, said in March that it had over 6,000 employees.

It had warned on Sept. 9 of the need to take “some difficult decisions on the size of our workforce to match the needs of a reduced scale of operations.” At the time, Northvolt declined to say how many jobs were likely to be affected.

Alongside plans to lay off staff, the cash-strapped company said it would suspend plans for a sizable expansion of Northvolt Ett, noting the project had been intended to provide an additional 30 gigawatt hours of annual cell manufacturing capacity.

The announced measures come as part of a broader strategic review and in response to what Northvolt described as “a challenging macroeconomic climate.”

Based in Stockholm, Sweden, Northvolt is one of Europe’s most valuable privately-held tech firms that builds lithium-ion batteries for the electric vehicle industry. It has partnerships with a number of major European automakers, including Volkswagen and Volvo.

Peter Carlsson, chief executive officer and co-founder of Northvolt, said in a statement that the company needed to focus all energy and investments into its core business.

“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,” Carlsson said.

“Recent production records at Northvolt Ett show that we are on the right path, but the decisions we’re taking today, however tough, are required for Northvolt’s future,” he added.

— CNBC’s Ryan Browne contributed to this report.