Swedish gigafactory Northvolt to cut 1,600 jobs after BMW cancels $2.2 billion contract; "We now need to focus ...," CEO tells employees

Northvolt, a leading European battery manufacturer, has announced plans to lay off 1,600 employees across its Swedish operations. The decision comes in response to a strategic review triggered by the cancellation of a major contract with BMW.
Reports suggest that car maker BMW — a shareholder – recently cancelled a $2.2 billion contract with the company due to production delays.
The company has been facing challenges in scaling up production and securing additional funding. To address these issues, Northvolt is focusing its efforts on accelerating battery production at its Ett manufacturing center. This shift in strategy has necessitated significant job cuts.
The layoffs will be distributed across various locations, with the most significant impact felt in Skelleftea, where 1,000 positions will be eliminated. Vasteras and Stockholm will also be affected, with 400 and 200 job cuts respectively.

“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.
“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
Despite the layoffs, Northvolt remains committed to its existing automotive customers and has implemented an acceleration program to boost production. Recent progress in this area has shown positive results, with a threefold increase in cell production since the beginning of the year.
However, the company continues to face financial challenges. Northvolt has struggled to close its latest funding round, seeking to raise $1.2 billion but potentially settling for a smaller amount.
The Swedish battery maker's largest shareholders, Volkswagen and Goldman Sachs, have not publicly disclosed their plans for future investment in the company. As Northvolt navigates these turbulent times, the outcome of its strategic decisions will determine its long-term viability in the competitive electric vehicle market.