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RIDGEVILLE, S.C. (WCIV) — Volvo Cars confirmed Monday that it plans to make a "small reduction" to its workforce at its South Carolina plant in Ridgeville.

The changes are part of a shift to "regionalization" in response to what a spokesperson described as "challenging macro conditions."

"Our aim is to support impacted employees, protect as many jobs as possible and secure Volvo Cars’ long-term future in the US, balancing our investments with the need to reduce costs and improve efficiency," a statement from a Volvo Cars spokesperson continued.

The Charleston area plant in Berkeley County employs around 2,500 people. The layoffs will directly affect about 5% of the staff, a Volvo spokesperson said.

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Currently, the company is planning to reduce the workforce for office and assembly jobs at the plant. Volvo said it plans to remain committed to creating 4,000 jobs in South Carolina and plans to "refill open positions" as it evolves production plans to meet the current economic environment.

Volvo Cars first broke ground on the plant in September 2015.

“The automotive industry has an extraordinary impact on South Carolina's economy," said Dr. Joseph Von Nessen, a research economist at the Darla Moore School of Business, "and in fact [it] has been one of the primary drivers of South Carolina's growth over the last 15 years.”

The company is based in Sweden, and its shift to "regionalization" could be linked to the uncertainty within the United States economy as a result of President Donald Trump's aggressive position on tariffs.

The statement from Volvo comes nearly a week after CEO Hakan Samuelsson revealed the company planned to initiate a "cost and cash action plan," due to its shares hitting record lows, according to a report from Reuters.

"We need to be more efficient in our white-collar areas, need to slim down the organisation," Samuelsson told Reuters. "(We need to) work smarter, and that, of course, will lead to a reduction of personnel."

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The Sweden-headquartered company is one of the most exposed European automakers to U.S. tariffs, as most of the cars it sells in America come by way of imports from Europe.

However, the decision to initiate a "small reduction" at the Charleston plant also comes as a surprise. During the unveiling of the "cost and cash action plan," Samuelsson reiterated that there would be expanded production at Volvo's Charleston, South Carolina factory, according to Reuters.

"We plan to bolster output at our South Carolina plant in the future," a spokesperson said, "including adding new models to increase local production."

Just last week, Trump signed executive orders to relax some of his 25% tariffs on automobiles and auto parts, a significant reversal as the import taxes threatened to hurt domestic manufacturers.

"We see the cost borne upfront," Nessen said. "But the potential benefits often come down the road. Targeted tariffs are typically better than blanket tariffs that apply to everyone."

STOCKHOLM, May 7 (Reuters) - Volvo Cars (VOLCARb.ST), opens new tab said on Wednesday it would make production changes and cut 5% of the workforce at its Charleston plant in the United States due to changing market conditions and evolving trade policies, including tariffs.

A spokesperson for Volvo Cars said the changes would affect about 125 of the 2,500 employees at its factory in South Carolina.

It was not immediately clear which positions would be affected or how the cuts would affect production at the plant in Charleston.

Volvo Cars, which is majority-owned by China's Geely Holding (GEELY.UL), said it remained committed to creating 4,000 jobs in South Carolina and that it still planned to boost output there in the future.

It added in an emailed statement that the cuts were not included in the upcoming redundancies flagged alongside its earnings for the first quarter last week, when it said it would slash costs by 18 billion Swedish crowns ($1.88 billion).

Volvo Cars declined to comment on when it would be able to disclose more details around the upcoming job cuts.

The carmaker said the United States remained a key part of its long-term strategy and that it was focused on sharpening its U.S. product line-up and manufacturing.

Volvo Cars has nearly 43,000 employees globally according to its 2024 annual report. Some 29,000 are in Europe, around 10,000 in Asia and 3,000 in the Americas region.

While the Charleston factory has a capacity to produce 150,000 cars annually, it currently only makes the EX90 electric SUV and Polestar's model 3 with most cars imported from Europe.

In an April retail sales update the company said it had sold 1,316 EX90s in the U.S. year to date.

($1 = 9.5804 Swedish crowns)