Swedish electric car battery maker Northvolt will lay off more than half its 5,000 staff while it searches for a buyer after filing for bankruptcy, the court-appointed trustee told media Monday.
Founded in 2016, Northvolt had been seen as a cornerstone of European attempts to catch up with Asia and the United States in the production of battery cells, the crucial component of electric vehicles.
On March 12, struggling under a mountain of debt, it applied for bankruptcy in Sweden and was put under the supervision of court-appointed trustee Mikael Kubu.
Around 1,700 of its staff will remain working during the bankrupcty process, Kubu was quoted as saying by Swedish news agency TT on Monday.
Despite the drastic reduction in staff, Kubu said the business would be able to continue operations during the bankruptcy process, "which is likely crucial to be able to sell the business entirely or partially".
Kubu said that the staff who were being made redundant would begin receiving notices on Tuesday.
Northvolt's main factory in Skelleftea, northern Sweden, where some 3,000 employees worked, will retain 1,200 staff, according to business media outlet Affarsvarlden.
Northvolt had struggled under a mountain of debt, slow demand and production delays, which in May 2024 led car manufacturer BMW to drop an order worth two billion euros ($2.2 billion).
In September, the Swedish company said it was slashing 1,600 jobs and suspending the expansion of its Skelleftea site.
Northvolt filed for Chapter 11 bankruptcy protection in the United States in late November to enable it to restructure its debt and reorganise its business.