Swedish battery maker Northvolt announced Monday morning that it is cutting 1,600 jobs in Sweden as part of its “strategic review” to address a tight financial situation and slowing demand.
Its giant factory in northern Sweden, in Skelleftea, will be the hardest hit with around 1,000 job losses, it said in a statement.
“The overall momentum for electrification remains strong, but we need to ensure that we take the right steps at the right time to respond to headwinds from the automotive market and the broader industrial climate,” Northvolt CEO Peter Carlsson said in the statement.
On September 16, the Swedish government refused to come to the aid of the multinational, whose financial difficulties have been publicized for several weeks.
The day after this news, Energy Minister Christine Fréchette stated that there was “no question of reducing the energy blocks reserved for Northvolt,” whose mega-battery plant project on Montreal’s South Shore has been postponed. The multinational reiterated its “commitment” to Quebec, without venturing to announce when construction of its plant in Montérégie would be completed.
“Short-term ambitions”
Some 400 jobs will be cut at its Vasteras research site, 100 km west of Stockholm, and 200 in the capital where most of the support functions are based.
The industrial group, which announced at the beginning of September a reduction in its activity and its workforce, confirms that it is “suspending” all development projects at its giant Skelleftea site, in the north of the country, where it is struggling to accelerate its production rates.
“By adjusting its short-term ambitions and focusing on ramping up Northvolt Ett’s first 16 GWh phase, Northvolt is positioning itself to prioritise its commitments to its existing automotive customers,” he said.
German car manufacturer Volkswagen (21%) is Northvolt’s largest shareholder.
Production delays
Founded in 2016, Northvolt is one of Europe’s great hopes in terms of batteries at a time when Europe is trying to catch up with Asian and American giants. But the group has accumulated production delays in recent months.
In May, BMW had thus abandoned a two billion euro order concluded with Northvolt for the delivery of batteries due to these delays.
Northvolt has raised $15 billion in financing since inception, split between debt and equity
According to Swedish media, the group is trying to organize a new share issue for 7.5 billion crowns (660 million euros).
More details will follow.