Volvo cuts 850 more jobs at construction unit

STOCKHOLM: Sweden's Volvo AB said on Thursday it planned to slash 850 more jobs at its construction equipment unit because of a slowdown in the market.

The company, which also makes trucks and buses, previously had announced it would cut 500 jobs from the construction unit in Sweden and that it would close down a plant in Canada.

It has also given notice to 1,400 workers at truck plants in Belgium and Sweden because of falling demand in Europe.

Volvo said the latest round of layoffs would affect workers at four plants in Sweden, and that negotiations with unions would start immediately.

The construction equipment unit makes excavators, loaders, pavers and other construction vehicles. It has about 16,000 employees.

The job cuts were needed ``to adjust production capacity to declining demand and to ensure that the company is coming out stronger from this downturn,'' said Yngve Rosen, a manager at the unit.

Evli Bank analyst Michael Andersson said the latest move could ``be a sign that Volvo Construction Equipment hasn't received any orders in the past few weeks.''

Volvo spokesman Klas Magnusson said the unit ``can't just build machines to put them into storage,'' but declined to give details on order bookings before Friday's earnings report.

Volvo sold its car division to US-based Ford Motor Co in 1999.