STOCKHOLM -- Volvo Cars will lay off 1,300 white-collar employees in Sweden, with the automaker saying it needs to step up its shift to new products and business models amid the coronavirus pandemic.
The layoffs have become more urgent as car sales slump because of measures to restrict the spread of the virus, Volvo said in a statement on Wednesday.
"We cannot expect customers to come back and demand exactly the same products as before the crisis," CEO Hakan Samuelsson said in a phone interview. "The coronavirus means that it’s even more important to change rapidly, and doing it by voluntary redundancies will not be fast enough."
The layoffs announced on Wednesday will reduce staffing in "non-focus areas," such as activities related to combustion engine production and testing, Samuelsson said.
Manufacturing operations will not be affected by the cuts, the company said.
The coronavirus pandemic has forced automakers around the globe to halt production and react to a rapid slump in demand. Volvo reopened its factories in Sweden last week after an almost month long shutdown.
Zhejiang Geely Holding Group bought Volvo Cars from Ford Motor Co. in the wake of the 2008 financial crisis. Since then, the automaker has revamped its lineup and invested in new business models, including subscription services and car-sharing.
Volvo has also launched its first all-electric model and aims to raise its total of all-electric cars to 50 percent of overall sales by 2025.
Volvo has 24,000 staff in Sweden excluding about 2,000 consultants.
Reuters contributed to this report