Volvo Cars has paused white-collar recruitment worldwide and tightened external spending as the Swedish luxury automaker faces softening demand in major markets including the US and China, according to Gasgoo.
The company, which employs about 20,000 white-collar workers globally, including roughly 1,000 in the US and Canada, said in an internal memo that it would halt external hiring, review internal recruitment, and further curb overall external spending. The measures aim to reduce operational complexity and focus resources on areas with the greatest impact on performance and transformation, the memo said. The freeze does not apply to factory-related operations such as procurement and logistics.
US market pressure
The US, Volvo's second-largest market, faces particular challenges. According to Automotive News Research & Data Center, Volvo's share of the US luxury market fell to 5.8% last year, the lowest since 2019, while sales dropped to 121,600 units, a four-year low. Globally, Volvo's retail sales fell 7% year-on-year to 710,000 units.
In the first quarter of 2026, Volvo's US sales plunged 32% year-on-year to their lowest level since 2020. Although second-quarter sales recovered somewhat, first-half volumes were still 12% below the same period last year. Factors include US import tariffs on European-built cars, the elimination of the federal EV purchase tax credit, and weaker consumer demand for plug-in models. Edmunds data shows Volvo's average US inventory stood at 88 days in the first half, well above the industry average of 63 days and last year's 81 days.
In response, Volvo is shifting its US product lineup away from sedans and wagons toward larger crossovers, reducing lower-margin models, and accelerating plans to build more models, including the XC60, at its plant near Charleston, South Carolina, to mitigate tariff impacts. Despite new US restrictions on Chinese cars and related technology, Volvo has received US government approval to continue selling models that use technology from its parent company Geely.
Cost-cutting plan
Last year, Volvo announced an $1.8 billion (18 billion Swedish kronor) cost and cash management program, including cutting about 3,000 jobs, mostly white-collar positions, roughly 15% of its office staff. Most of the cuts, concentrated in Sweden but affecting global operations, were completed by the end of 2025.
CEO Hakan Samuelsson said in May 2025 that the auto industry is in a challenging period and the company must improve cash flow and reduce costs structurally. In late August, Volvo announced it would close its Stockholm office, affecting about 450 employees, with functions moving to Gothenburg headquarters by March 1 next year.
Volvo's tightening reflects broader pressures on traditional automakers, including intensifying competition from Chinese brands, slowing EV demand, high European labor and energy costs, and changing trade conditions. According to CNBC, Detroit's Big Three have cut more than 20,000 salaried positions, about 19% of their combined workforce. Stellantis has also implemented a hiring freeze in North America and plans nearly $7 billion in cost savings by 2028. European automakers, including Volkswagen, are cutting tens of thousands of jobs and consolidating plants, while Jaguar Land Rover plans to cut about 4,000 jobs and Mercedes-Benz has warned that two German plants could close if cost reductions fail.
