Volvo Cars announced on Monday that it will cut approximately 3,000 positions globally as part of a broader cost-reduction strategy aimed at navigating challenging conditions in the automotive industry.
The move is part of an 18 billion Swedish kronor ($1.89 billion) cost and cash flow improvement plan unveiled by the company in late April.
The job reductions will primarily affect office-based roles, particularly in Sweden, and account for about 15% of the firm’s total office workforce. Approximately 1,200 employees based in Sweden and around 1,000 external consultants, also largely in Sweden, will be impacted. The remaining job cuts will take place across Volvo’s global operations.
“The automotive industry is in the middle of a challenging period,” said Håkan Samuelsson, Volvo Cars President and CEO. “To address this, we must improve our cash flow generation and structurally lower our costs. At the same time, we remain committed to developing the talent we need for our long-term goals.”
The restructuring is part of Volvo’s response to declining electric vehicle (EV) demand, rising costs, and trade uncertainties—particularly involving the United States and European Union. The company, which is majority-owned by China’s Geely Holding, is seen as more exposed to new US tariffs than some of its European counterparts due to its production footprint in Europe and China.
In April, the automaker withdrew its financial guidance for 2025 and 2026, citing pressures from global tariffs and market volatility. These external factors have created an unpredictable business environment, prompting Volvo to scale back on investments and streamline operations.
The firm reported a 60% drop in first-quarter operating income and said the restructuring could result in charges of up to 1.5 billion kronor ($140 million), affecting its second-quarter results.
Despite recent challenges, Volvo Cars reaffirmed its ambition to become a fully electric vehicle manufacturer. However, in a move toward flexibility, the company has stepped back from its earlier timeline for going all-electric, citing the need to adapt to evolving market dynamics.
As of December 2024, Volvo Cars employed approximately 43,800 people worldwide.
CNBC, the Wall Street Journal, Bloomberg, and Reuters contributed to this report.
