Northvolt Cuts 1,600 Jobs in Sweden, Focuses on Production

Northvolt has announced a revised scope of its operations in Sweden, prioritizing the ramp-up of production at its flagship facility, Northvolt Ett, while scaling back other projects. This decision comes as part of the company’s response to a challenging macroeconomic environment and follows a strategic review aimed at securing long-term sustainability. As part of these changes, approximately 1,600 jobs will be cut across Sweden, a move Northvolt acknowledges as difficult but necessary.

Job losses in Sweden

The majority of job losses will be at the Northvolt Ett site in Skellefteå, where 1,000 positions are expected to be made redundant. Another 400 positions will be cut in Västerås, while Stockholm will see 200 roles eliminated. These redundancies amount to about 20% of Northvolt’s global workforce and are still subject to negotiations with local unions. Northvolt CEO and Co-Founder Peter Carlsson addressed the situation, 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 and wider industrial climate."

Northvolt Ett – a lithium-ion battery facility located just south of the Arctic Circle. Courtesy of Northvolt.

The company is narrowing its focus to ensure it can accelerate production in its large-scale cell manufacturing facility's first 16 GWh phase of Northvolt Ett. The decision to pause further expansion of the plant, which would have added an additional 30 GWh of annual production capacity, is aimed at consolidating resources to meet the commitments of existing automotive customers. Northvolt has introduced an acceleration program to further scale up production, which Carlsson noted has already shown results, tripling cell production at Northvolt Ett since the beginning of the year.

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Slowing down battery developments

In addition to suspending expansion at Northvolt Ett, the company is slowing down developments at its Västerås-based Northvolt Labs, a hub for innovation and battery development. Despite the reduction in activities, Northvolt Labs will retain its position as Europe’s leading center for battery innovation, maintaining its fundamental platforms. Corporate functions, primarily located in Stockholm, will also be scaled back in response to these shifts in operations.

Daniela Maniaci, Chief People Officer at Northvolt, acknowledged the impact the job cuts will have, stating, “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.”

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Northvolt battery cell lab. Courtesy of Northvolt.

Northvolt has established internal resources to assist affected employees in finding new employment and relocating. Additionally, a task force is being set up with external partners to support employees on work visas and their families. Despite the difficulties, Carlsson reaffirmed Northvolt’s commitment to building a sustainable European battery industry, emphasizing, “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.”

While these decisions significantly impact operations in Sweden, they also raise questions about Northvolt’s international projects, particularly its ambitious battery plant in Quebec.

Quebec worries

As Northvolt scales back in Sweden, it assures stakeholders that its $7 billion battery plant project in Quebec remains on track, as reported by CBC News. The plant in Saint-Basile-le-Grand, southeast of Montreal, is progressing, with 60% of excavation completed for its first building. However, Northvolt's announcement has raised concerns among Quebec politicians who question the government's significant financial commitment to the project.

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These reactions underscore the connection of Northvolt's operations across borders, as the implications of its strategic review resonate in Quebec. Liberal MNA Frédéric Beauchemin expressed his concerns in an interview with CBC News, stating, "We could have gone with quality players… But the government decided to go all in with a player that's a startup. Don't ask me why; I don't understand that choice.” Opposition parties, including the Parti Québécois (PQ), have called for an emergency debate to address potential risks to Quebec’s investment and the project's environmental impact.

According to the news outlet, Quebec's newly appointed Economy, Innovation, and Energy Minister, Christine Fréchette, defended the decision, referring to the project as a "controlled risk" with significant financial and environmental benefits for the province. However, the project may face delays. Initially slated to begin production in 2026, the timeline could extend to 18 months due to Northvolt’s strategic review.

The job cuts and operational adjustments reflect Northvolt and other battery makers' broader challenges as they navigate a shifting market landscape. While the push for electrification remains strong, the transition to electric vehicles (EVs) has slowed, impacted by economic headwinds and fluctuating demand in the automotive sector. These challenges have made it difficult for battery manufacturers like Northvolt to scale up production as rapidly as initially planned. Despite setting records in cell production, Northvolt’s decision to scale back and focus on core operations underscores the pressures within the EV supply chain. As Northvolt adjusts to these realities, it remains determined to emerge stronger, continuing its critical role in advancing sustainable battery solutions and supporting the global shift toward electric mobility.