The fallout from Northvolt’s bankruptcy, Sweden’s largest in modern history, is sending shockwaves across the labor market. Nearly 5,000 employees now face unemployment, with many, particularly those from non-EU countries, at risk of losing their right to stay in Sweden.
“It is a very dark day for all of us who have worked hard every day and hoped that the company would get through this tough time,” said Shaneika Jeffrey, Vice Chairman of the Unionen club in Skellefteå, where Northvolt employed thousands.
Work permits in jeopardy
Northvolt’s workforce includes employees from around the globe, particularly from non-EU countries. For many, job loss means not just financial insecurity but also the risk of being forced to leave Sweden.
“It is extra precarious for them to quickly find a new job if they are laid off. Otherwise, their work permit can be revoked, and then they will not be allowed to stay in Sweden anymore,” explained Helene Robson, chief lawyer at Sveriges Ingenjörer.
According to Migration Agency estimates, approximately 1,700 Northvolt employees were from third countries as of last autumn. When layoffs began, 300 of them were dismissed. Now, thousands more face an uncertain future, with Swedish work permit regulations allowing only three months for displaced workers to find new employment before they must leave the country.
Immediate and long-term consequences
In the short term, Northvolt employees will receive salaries through the state’s wage guarantee, managed by the bankruptcy administrator. However, in the long run, many are expected to join Sweden’s Employment Agency and apply for unemployment benefits.
“If you draw parallels to other giant bankruptcies in modern times, such as Saab Automobile, it is probably inevitable that a very large part of the staff will be laid off,” said Robson.
Hope for salvaging operations
Despite the grim outlook, Northvolt’s interim chairman, Tom Johnstone, has expressed hope that the company’s operations might continue under new ownership, potentially saving some jobs.
“I hope this is not the last chapter,” said Peter Carlsson, Northvolt’s former CEO, at a press conference.
However, the ultimate fate of Northvolt’s assets and remaining operations now rests with the bankruptcy trustee, who will determine whether any parts of the business can be saved.
As Sweden reels from the collapse of its flagship battery producer, thousands of former employees must navigate an uncertain road ahead, with many facing not only job loss but also the prospect of leaving the country they have come to call home.
