Northvolt lays off half of staff as bankrupt battery-maker seeks buyer

Embattled Swedish battery-maker Northvolt has laid off more than half of its staff, weeks after filing for bankruptcy.

Once seen as Europe’s best chance at competing in an industry dominated by China, Northvolt went from raising a $1bn funding round — Europe’s biggest ever at the time — to filing for chapter 11 bankruptcy in the US and making sweeping internal cuts.

Of the company’s approximately 4,500 employees in Sweden, 1,700 people will keep their jobs, bankruptcy trustee Mikael Kuba said on Monday. Of the almost 3,000 who currently work in the Skellefteå factory, 1,200 will remain.

“Other personnel will be laid off and notification of this will be sent to the affected persons starting tomorrow,” Kubu said in a written statement to Swedish TT News Agency.

This means that operations in Sweden will continue until further notice but in a significantly reduced form. To continue operations is “likely crucial for being able to sell the operations in whole or in part,” Kubu says.

Northvolt employees in other countries will not be affected.

Northvolt filed for bankruptcy in the US in November last year, before then filing again in Sweden in March. The company — which raised $13bn in debt and equity from investors including Goldman Sachs and Volkswagen — fell behind on battery orders from June last year, and then gradually ran out of cash.

Kubu said the company has been able to reach agreements with the most relevant stakeholders affected by its bankruptcy, providing them with financial guarantees, which then allows Northvolt to continue some of its operations. The agreements are set to be finalised in the next few days, Kubu said.

Snapping up talent

Sweden’s home to several other industrial projects which could look to snap up Northvolt’s outgoing talent — particularly as convincing people to move up to Sweden’s frozen North, where Northvolt and many other projects are located, is tough.

Northvolt was able to convince talent from US tech companies like Tesla, Amazon and Google to move to Skellefteå, a town of under 100,000 people in the country’s North.

Stegra, a Swedish company which produces green steel, is one which is looking to hire. It told Sifted at the end of last year that it plans to grow its staff from 300 to 1,500 by the end of this year.

“There’s a lot of great talent in Northvolt that might be looking for new opportunities,” Stegra CEO Henrik Henriksson told Sifted in December. “We are trying to see what we can do.”