Europe’s Leading Battery Maker, Northvolt to Now Cut 1,600 Jobs

In a significant move, Northvolt, Europe’s leading battery manufacturer, has announced plans to reduce its workforce by 1,600 positions, amounting to 20% of its staff in Sweden. This decision comes as the company confronts challenging market conditions and seeks to refocus its business strategy.

Job Cuts in Response to Industry Challenges

On Monday, Northvolt revealed that it would implement job cuts across its three Swedish sites: Skellefteå, Västerås, and Stockholm. Specifically, the company will eliminate 1,000 jobs in Skellefteå, where the expansion of the Northvolt Ett gigafactory is being suspended. Additionally, 400 positions will be cut in Västerås and 200 in Stockholm.

CEO Peter Carlsson emphasised the necessity of these actions, stating, “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.” He further explained that the company must concentrate its efforts and investments on its core business.

Financial Uncertainties and Strategic Shifts

Northvolt’s job cuts have emerged amid reports of financial difficulties and an urgent need for new investments. Recent figures highlight a slowdown in consumer demand for electric vehicles (EVs) across Europe, with sales in the EU dropping to 643,000 units in August. This decline has compounded pressures on Northvolt, which has faced production challenges that led to order cancellations, including a significant $2 billion order from BMW earlier this year.

The firm has been seen as a frontrunner in Europe’s battery production landscape, competing with established Chinese manufacturers that dominate the market. Despite securing over $50 billion in orders, Northvolt remains in the red, reporting losses of $1.2 billion last year, a stark increase from $285 million the previous year.

Focus on Core Operations

In light of these challenges, Northvolt has pivoted away from its original ambition to be an all-encompassing battery supplier, now concentrating on scaling production capabilities at the Northvolt Ett facility. The project is expected to eventually deliver 16 gigawatt-hours (GWh) of battery cell production capacity, although previous plans for an additional 30 GWh have been put on hold.

Peter Carlsson remarked, “Success in the ramp-up of production at Northvolt Ett is critical for delivering to our customers and enabling sustainable business operations.” He acknowledged that while recent production records indicate progress, tough decisions are essential for the company’s future.

Concerns Over Safety and Environmental Impact

Separately, Northvolt has faced scrutiny following reports of a toxic chemical leak at its Skellefteå facility. Faulty pipes have led to the release of NMP, a substance used in battery manufacturing. However, the company defended its operational standards, asserting that emissions were managed according to permits and that the factory was designed to withstand the local climate.

A spokesperson stated, “We have taken preventative and corrective measures to prevent and minimise any incidents,” reinforcing the company’s commitment to environmental safety.

Conclusion

As Northvolt navigates a turbulent landscape in the electric vehicle sector, the company’s decision to cut jobs and refocus its operations signals a critical juncture. With increasing competition and sluggish demand, the firm must adapt to ensure its survival and contribute to Europe’s green technology ambitions.