Autoliv, the world’s leading manufacturer of airbags and seatbelts, has announced its plans to cut approximately 8,000 jobs in response to the challenges posed by high inflation.
This move comes as the company joins the growing list of businesses that are accelerating cost-saving measures in order to navigate the current economic landscape.
Autoliv To Layoff 8000 People Due To High Inflation
The Swedish company, which supplies renowned automakers worldwide, revealed that around 6,000 direct jobs and up to 2,000 indirect positions will be affected.
The indirect positions include employees who are not directly involved in the production lines.
These job cuts account for roughly 11% of the company’s direct and indirect workforce. Autoliv’s restructuring plan also involves the closure of multiple sites in Europe. The company expects the implementation of these measures to be completed by 2025.
Autoliv’s CEO, Mikael Bratt, emphasized that the aim of these initiatives is to optimize the company’s geographic footprint and enhance its overall operational efficiency. He stated that Autoliv intends to simplify and consolidate its operations in various areas.
This downsizing trend is not unique to Autoliv but is also prevalent across the auto industry and other sectors, as companies grapple with high inflation and an uncertain global economy. For instance, Volvo Cars recently announced the elimination of 1,300 positions, while electric carmaker Polestar revealed plans to reduce its workforce by 10%.
Autolive Faced With Severe Cost Inflation
Autoliv had already warned about the challenges posed by cost inflation in early 2022, which was reportedly the most severe in three decades. The company had sought to pass on these increased costs to its customers.
“These initiatives will continue to optimise our geographic footprint for a more effective structure. We intend to simplify and consolidate how we operate in all areas,” as per CEO Mikael Bratt in a statement.
Despite the job cuts and cost-saving measures, Autoliv remains committed to its full-year outlook. The company reiterated its forecast, originally provided in April, which projects an increase in its adjusted operating margin to approximately 8.5-9.0%.
Following the announcement, Autoliv’s shares listed on the Swedish stock exchange rose by 3.4% to reach 988 Swedish crowns at 1011 GMT.
