Volvo Cars is cutting 2,500 jobs, mainly in Sweden, as it swings to a third-quarter operating loss, blaming intense competition from Chinese electric-vehicle makers, weak demand, and tariff pressures. The move comes on top of an earlier cost-reduction program as the company braces for a tougher market environment.
The Swedish automaker reported an adjusted operating loss of 3.7 billion Swedish kronor (about $373 million) for the third quarter, compared with a profit of 5.8 billion kronor a year earlier, according to a statement cited by Chinese outlet Gasgoo. The company said it will cut an additional 5 billion kronor in indirect and variable costs, on top of a previously announced 23 billion kronor savings plan, with the benefits expected to be realized by the end of next year.
Of the 2,500 planned job cuts, about 2,000 will be in Sweden. Volvo said it will achieve the reductions through ending consultant contracts, natural attrition, and offering targeted severance packages. CEO Hakan Samuelsson said the third-quarter results were "very disappointing" and that the operating environment has proved far more challenging than initially expected, prompting stronger measures under the company's transformation plan.
Samuelsson told Reuters that the layoffs are expected to be completed by mid-2027, and he did not rule out further actions if the transformation plan underperforms. Earlier this month, Volvo withdrew its full-year sales and cash-flow guidance, citing a deteriorating market and short-term headwinds.
China market struggles
Volvo's China business has been a particular drag, with third-quarter revenue nearly halving year-on-year. The company faces stiff competition from domestic EV brands that have been aggressively cutting prices, while tariffs on imported vehicles and weak overall demand have compounded the pressure. The company's gross margin fell to 14.7% in the third quarter from 20.4% a year earlier, a key metric investors watch to gauge the impact of tariffs and dealer incentives.
This is the second round of job cuts under Samuelsson, who returned as CEO in 2025. Shortly after his return, Volvo announced 3,000 layoffs and an 18 billion kronor cost-saving program, along with deeper collaboration with Geely-owned brands. The new cuts add to those efforts.
Volvo's shares hit an all-time low last week and have fallen 54% this year, hurt by tariffs, weak EV demand, and high R&D spending. The company's struggles reflect the broader challenges facing traditional automakers as Chinese EV makers expand globally and price competition intensifies.