Stockholm-based Northvolt, a lithium-ion battery manufacturer, has announced a restructuring of its operations in Sweden, to accelerate large-scale battery cell production at its flagship facility, Northvolt Ett.
As part of this shift, the company will reduce its workforce by nearly 1,600 employees across its Skellefteå (1,000 positions), Västerås (400 positions) and Stockholm (200 positions) locations.
These job cuts, which affect around 20 per cent of Northvolt’s global workforce and 25 per cent of its Swedish operations, are subject to ongoing union negotiations.
The restructuring is part of Northvolt’s strategy to prioritise its core production goals, particularly the ramp-up of the first 16 GWh phase of Northvolt Ett. The company’s newly introduced acceleration programme has shown progress, with production output tripling since the beginning of the year.
According to Reuters, BMW cancelled a $2.2B contract with Northvolt due to production delays. In response, Northvolt is refocusing on ramping up battery production at its Ett facility, resulting in significant job cuts.
Earlier this year, in January, the European Investment Bank announced that it will finance Northvolt with a lending package of over $1.038B (€942.6M).
Revised operations across Sweden
In Skellefteå, the planned expansion of Northvolt Ett, which would have added 30 GWh of annual cell manufacturing capacity, has been suspended. This follows the earlier decision to place the Northvolt Ett cathode active material facility into care and maintenance.
In Västerås, where Northvolt Labs is based, the company will slow down certain programmes and expansion efforts. However, Northvolt Labs will continue to serve as a key hub for battery innovation and product development.
Corporate support functions in Stockholm will also be downsised as part of the overall operational rescoping.
Peter Carlsson, CEO and co-founder of Northvolt, says, “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.”
“We now need to focus all energy and investments into our core business. Success in the ramp-up of production at Northvolt Ett is critical for delivering to our customers and enabling sustainable business operations.”
“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.”
Workforce reductions and support measures
Northvolt has acknowledged the significant impact these changes will have on employees, particularly in Skellefteå. The company is working with unions and external partners to assist affected employees, including offering help with job searches and relocation.
A special task force is being established to support workers on visas and their families.
Daniela Maniaci, Chief People Officer, says, “Today marks one of the most challenging times in our company’s journey, as we face the difficult reality of reducing our workforce. Our priority is to offer as much support as possible during this time to all our employees, especially those impacted by redundancy.”
“In supporting employees who will leave the company, we are committed to handling the process with compassion and care, and ensuring everyone receives guidance needed for their next steps.”
Commitment to long-term growth
Despite the reductions, Northvolt is focused on its goal of building a European battery manufacturing base.
The company aims to create a stronger foundation for future growth and industrial development in Europe by narrowing its immediate focus and concentrating resources on scaling up cell production.
Co-founder Carlsson, says, “The decisions announced today are both challenging and painful. I and all my colleagues at Northvolt will do everything we can to support the colleagues who will eventually leave the company.”
“The decisions are, however, necessary to adjust for current realities and enable the long-term success of Northvolt. We are determined to overcome the challenges we face, and to emerge stronger and leaner as we continue forward in our work to contribute to a more sustainable society.”
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