Northvolt, a prominent battery manufacturer in Sweden, is set to reduce its workforce by 25% as part of a significant cost-saving initiative.

• Northvolt announced that after conducting a strategic review, the company has revised its operations in Sweden to prioritize large-scale cell manufacturing at Northvolt Ett.
• The factory in Skellefteå, located in the north of the country, was expected to result in the redundancy of approximately 1,600 employees, including 1,000 positions.
• The company said all redundancies would be subject to ongoing union negotiations.

Northvolt, a battery manufacturer, announced on Monday that it would be cutting 1,600 jobs in Sweden as part of a significant cost-saving initiative.

Northvolt has revised its operations in Sweden to concentrate on accelerating production in large-scale cell manufacturing at Northvolt Ett, as part of a strategic review.

Northvolt must decrease its global workforce by approximately 20% and a 25% reduction in Sweden, the company stated.

The company stated that approximately 1,600 employees, including 1,000 positions at its factory in Skellefteå, would be made redundant as a result of these measures. The company emphasized that all redundancies would be subject to ongoing union negotiations.

In March, Northvolt announced it had over 6,000 employees at its first gigafactory Northvolt Ett in Skellefteå.

On Sept. 9, it was announced that "some difficult decisions" would need to be made regarding the size of Northvolt's workforce to align with the reduced scale of operations. At that time, Northvolt did not disclose the number of jobs that would be impacted.

The company, facing financial difficulties, announced that it would halt plans for a significant expansion of Northvolt Ett, which was intended to increase annual cell manufacturing capacity by 30 gigawatt hours.

In response to the challenging macroeconomic climate, Northvolt has announced measures as part of a broader strategic review.

Northvolt, a privately-held tech firm based in Stockholm, Sweden, is one of Europe's most valuable companies that specializes in building lithium-ion batteries for the electric vehicle industry. The company has formed partnerships with major European automakers, including Volkswagen and Volvo.

Northvolt's CEO and co-founder, Peter Carlsson, stated that the company should direct all its resources and funding towards its primary operations.

Carlsson stated that although the overall trend towards electrification is robust, it is crucial to take appropriate actions at the appropriate time in response to challenges in the automotive industry and the broader economic climate.

"Northvolt Ett's recent production records indicate that we are moving in the right direction, but the difficult decisions we make now are crucial for our future," he stated.

— CNBC's Ryan Browne contributed to this report.