OSLO (Reuters) – Volvo Group will restructure its European bus-making operation in a bid to restore it to profitability, divesting from a Polish plant and axing 1,600 jobs, the Swedish company said on Thursday.

Volvo Buses will change its business model in Europe to focus on chassis production while cooperating with external companies for the bodybuilding, in line with a strategy pursued in other markets, it said.

Selling its bus-bodybuilding facility at Wroclaw in western Poland will trigger a restructuring provision of 1.3 billion Swedish crowns ($123.14 million) which will hit Volvo’s operating income in the first quarter of 2023, the company said.

“The decision to end the production of complete buses and coaches will impact approximately 1,600 positions at Volvo Buses, whereof around 1,500 are based in Wroclaw,” the group said in a statement.

Volvo will still have more than 2,100 employees in Poland working at Volvo Trucks, Volvo Construction Equipment and group support functions, the company added.

($1 = 10.5567 Swedish crowns)

(Reporting by Terje Solsvik, editing by Gwladys Fouche)

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