Bankrupt battery manufacturer Northvolt AB has made the decision to downsize its workforce to 1,700 employees in Sweden as part of its bankruptcy process. The remaining employees will unfortunately be laid off as the company continues to navigate through financial challenges.

Despite the workforce reduction, Northvolt's operations will continue in Sweden, which is seen as a positive step towards a potential sale of the business, according to Northvolt's bankruptcy trustee, Mikael Kubu.

With a significant workforce reduction from its previous total of about 7,000 employees, Northvolt faced financial difficulties after experiencing operational setbacks that led to its bankruptcy filing last year. The company's assets were recently put up for sale by a court-appointed trustee, marking a pivotal moment in its restructuring efforts.

Northvolt, once hailed as Europe's prominent battery manufacturer, accumulated substantial debt and equity totaling around $10 billion since its establishment in 2016. Multiple financing rounds led to a complex financial situation with lenders and shareholders facing potential losses.

Despite these challenges, the bankruptcy estates have made progress by reaching an agreement with stakeholders to secure financial guarantees for the company's ongoing operations. The details of this agreement are set to be finalized in the near future.