STOCKHOLM – Volvo Cars said on Oct 23 it will cut 2,500 jobs, mostly in its native Sweden, as the group seeks to slash costs amid tough competition from Chinese automakers and as tariffs and weak demand hit sales in the United States.
The company, majority-owned by China’s Geely Holding, reported an adjusted operating loss of 3.7 billion Swedish kronor (S$476.7 million) for the third quarter, down from a profit of 5.8 billion kronor a year earlier.
Volvo said that, in addition to its earlier cost reductions, it will cut an additional 5 billion kronor in indirect spend and variable costs, which it expects to be realised by the end of 2027.
Some 2,500 jobs will be lost globally, of which 2,000 are in Sweden as the group ends consultant contracts, applies natural attrition and offers “targeted exit packages” to employees, Volvo Cars said in a statement.
The group has long struggled to stay profitable amid cooling demand for electric vehicles (EVs), tough conditions in China – where revenue fell by almost 50% in the third quarter – and the strain of high costs and tariffs.
“The third quarter of 2026 was very disappointing and reflects a year that has become far more challenging than originally anticipated. Our ongoing turnaround plan therefore needs a decisive reinforcement,” Volvo Cars chief executive officer Hakan Samuelsson said.
Volvo Cars earlier in October scrapped its guidance for full-year sales volume and cash flow owing to what it said was an increasingly challenging market and deteriorating near-term outlook.
The new layoffs come on top of the 3,000 job cuts announced shortly after Samuelsson returned as CEO in 2025, when Volvo tightened costs across the company with an 18 billion kronor savings plan and deepened cooperation with Geely brands.
Volvo’s gross margin, a metric closely watched by investors to gauge the impact of tariffs and discounting, came in at 14.7% in the third quarter, compared with 20.4% in 2025.
The group’s share price hit a record low this week and is down 54% year-to-date, burdened by tariffs, weaker EV demand and high development costs. REUTERS
