By Marie Mannes
STOCKHOLM, Oct 23 (Reuters) – Volvo Cars said on Friday it will cut 2,500 jobs, mostly in its native Sweden, as the group seeks to slash costs amid tough competition from Chinese auto makers 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 crowns ($373 million) for the third quarter, down from a profit of 5.8 billion crowns a year earlier.
Volvo said that in addition to its earlier cost reductions it will cut an additional 5 billion crowns in indirect spend and variable costs, which it expects to be realised by the end of next year.
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 (EV), 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,” CEO Hakan Samuelsson said.
Volvo Cars earlier this month 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 crown 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 to 20.4% last year.
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.
($1 = 9.9195 Swedish crowns)
(Reporting by Marie Mannes, editing by Terje Solsvik)
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