The Swedish gigafactory Northvolt has announced that it’s laying off 1,600 people, split across its Swedish offices.
The news follows the “initial strategic review” that Northvolt published two weeks ago, after car maker BMW — a shareholder – cancelled a €2bn contract with the company because of production delays.
As the company has struggled to scale up production, and to raise fresh funding, it’s now outlining a new plan to focus efforts on accelerating battery production at its Northvolt Ett manufacturing centre in the north of the country, it says in a press release.
The new focus is expected to result in the redundancy of approximately 1,600 Northvolt employees,
The 1,600 layoffs will be split across 1,000 positions in Skellefteå, 400 in Västerås where Northvolt has its R&D centre and its headquarters in Stockholm where 200 jobs will go. The company has around 7,000 employees in total.
“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,” CEO Peter Carlsson says in a statement.
All redundancies are subject to ongoing union negotiations.
Following the strategic review, Northvolt will prioritise commitments to its current automotive customers and has recently introduced an acceleration programme geared to further increase levels of production.
According to the company, the programme is already demonstrating results and contributed to Northvolt Ett cell production increasing threefold since the beginning of this year, with a record of 66k cells in one week.
“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,” Carlsson said.
Northvolt, which is Europe’s best-financed climate tech with €11bn raised in debt and equity, has had difficulties closing its next round of funding. The Swedish battery maker had its eyes on raising a further $1.2bn, but is now trying to raise half that amount, according to Swedish media Dagens Industri.
Neither Volkswagen nor Goldman Sachs, Northvolt’s largest shareholders, has disclosed whether they'll inject fresh capital into the struggling company.
Correction: An earlier version of this article said that Northvolt had around 6,500 employees. The correct number is around 7,000.
