A battery giant now announces unexpected layoffs as the market slows, resulting in huge cost-cutting measures and contraction.
Northvolt, a major battery manufacturer for Europe’s electric vehicle sector, revealed on Monday its plans to reduce its workforce and shut down one of its production sites.
The company is also entering discussions with partners and investors regarding the future of its facility in Poland, per CNBC.
Headquartered in Stockholm, Northvolt has established itself as one of Europe’s most valuable privately held technology firms, specializing in lithium-ion batteries for electric vehicles.
The company has formed partnerships with several major automakers, including Volkswagen and Volvo.
In a strategic review, Northvolt stated it faced the need to make “difficult decisions” to align its workforce with a reduced scale of operations.
While the company did not specify how many jobs would be impacted, it emphasized that no final decisions have been made regarding the specifics of the layoffs.
“We remain in constructive discussions with the unions and will make every effort to minimize redundancies,” the company said.
The decision to implement cost-cutting measures stems from a “challenging macroeconomic environment” and a reassessment of Northvolt’s immediate priorities.
CEO and co-founder Peter Carlsson expressed that focusing on core operations is essential for establishing a solid foundation for long-term growth and supporting the development of a domestic battery industry in the West.
Northvolt has encountered various challenges recently, particularly with the broader electric vehicle market facing demand issues.
According to data from the European Alternative Fuels Observatory, electric vehicle registrations in Europe fell by 3% year-over-year in May, while plug-in hybrid registrations dropped by 10%, totaling 226,000.
Adding to its difficulties, Northvolt faced a major setback in June when BMW canceled a €2 billion contract for EV battery deliveries starting in 2024, citing Northvolt’s inability to meet deadlines.
In addition to job reductions, Northvolt is consolidating its battery production operations across Europe.
In Skellefteå, Sweden, the company has placed its cathode active material production facility, Northvolt Ett Upstream 1, into maintenance mode to optimize production costs.
Furthermore, the Northvolt Fem program in Kvarnsveden will be terminated, with the site already sold to an undisclosed buyer.
In Poland, Northvolt plans to discuss potential partnerships regarding Northvolt Systems, which includes its battery systems production site, Northvolt Dwa.
In the U.S., Northvolt intends to integrate its California-based subsidiary, Cuberg, into its Northvolt Labs unit in Sweden.
Last valued at $12 billion by investors, Northvolt has backing from prominent investors including BlackRock, Goldman Sachs, and Volkswagen.
The company is considered a strong candidate for an initial public offering (IPO) in Europe’s tech landscape, with reports suggesting it could be preparing for a stock market listing that might value it at over $20 billion.
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Also Read: Cisco Now Profits Billions And Makes Thousands of Unexpected Layoffs
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