Sweden is grappling with a rise in unemployment across much of the country this year, as economic headwinds and industrial setbacks strain regional labour markets. According to new figures from the Swedish Public Employment Service, unemployment climbed in 15 out of 21 counties during the second quarter of 2025, underscoring growing concerns about the nation’s economic trajectory.
Nationwide, the number of registered unemployed rose from 344,000 in Q2 2024 to 363,000 in Q2 2025, lifting the jobless rate from 6.6% to 6.9%. Estimates from other agencies put headline unemployment even higher, peaking at 9.7% in May and settling at 9.4% in June. The contrasts among Sweden’s regions, however, are stark — some areas are weathering the storm better than others, with deeper divides emerging.
Västerbotten: The Epicenter of Job Losses
Nowhere is the current crisis felt more acutely than in Västerbotten county, where unemployment spiked sharply following the abrupt closure of Northvolt’s flagship battery factory in Skellefteå at the end of June. This major facility, employing some 900 people at the time of closure, officially wound down after Northvolt filed for bankruptcy in March. The shutdown sent shockwaves through the northern economy, with layoffs and notices reverberating well beyond the factory gates.
“The largest increase [in unemployment] has occurred in Västerbotten, where extensive notices, layoffs and bankruptcy in battery manufacturing have had a major impact on the labour market,” said Marcus Löwing, a labour market analyst at the Employment Agency.
In total, up to 5,000 Northvolt workers—many on temporary visas—faced uncertain futures, with some granted a three-month adjustment period to find new employment in Sweden.
Contrasts: Pockets of Resilience and Recovery
Despite national headwinds, some counties bucked the trend. Unemployment actually fell in Dalarna, Gotland, Gävleborg, and Norrbotten during the same period. Norrbotten, home to mining-rich towns like Gällivare and Kiruna, currently has the lowest county-level unemployment rate in Sweden at 3.8%, compared to 9% in Skåne, which remains the hardest-hit region.
- Lowest municipal unemployment: Gällivare (Norrbotten) at 2.4%, Kiruna (Norrbotten) at 2.6%.
- Counties with lowest unemployment: Norrbotten (3.8%), Gotland (3.9%), and Jämtland (4.4%).
- Counties with highest unemployment: Skåne (9.0%), Västmanland (8.6%), and Södermanland (8.5%).
Demographic shifts—such as aging populations and out-migration in the north—have reduced the labour force in some counties, helping keep jobless rates lower even amid a broader economic slowdown. Local employers in these resilient counties also continue reporting recruitment challenges, especially in healthcare, education, and certain skilled trades.
Looking Ahead: A Difficult Recovery
Economic forecasters note that Sweden remains in recession, with employment expected to stay subdued for the rest of the year. While a gradual labour market recovery is anticipated to start in late 2025 and accelerate into 2026, elevated unemployment rates may persist in the near term.
For the thousands affected by plant closures—and regions reliant on large-scale employers like Northvolt—the journey to renewed economic vitality is likely to be slow and uneven. Communities in Västerbotten, in particular, now face the twin tasks of finding work for displaced staff and reinvigorating local industry.
As Sweden navigates these economic aftershocks, the regional divides spotlight a broader national challenge: ensuring no county is left behind in the country’s push toward labour market recovery and renewed growth.