Volvo Cars to cut 2,500 jobs after third-quarter loss
Volvo Cars will cut around 2,500 jobs globally, including around 2,000 in Sweden, after posting an adjusted operating loss of SEK 3.7 billion (about EUR 330 million) in the third quarter. The company aims to reduce costs by a further SEK 5 billion (about EUR 450 million), mainly in response to weak markets in China and the US.
Revenue fell 23% to SEK 66.9 billion (about EUR 6.0 billion), down from SEK 86.4 billion a year earlier, according to Volvo Cars’ quarterly report. Operating income, excluding joint ventures, associates and items affecting comparability, came to minus SEK 3.7 billion. That gives a margin of minus 5.6%, compared with plus 6.7% in the same quarter last year. Free cash flow was minus SEK 8.9 billion (about EUR 800 million).
In China, revenue fell by almost 50%. Like other established premium brands, Volvo Cars faces intense competition from new Chinese carmakers and severe pricing pressure. In the US, tariffs and the removal of incentives for electrified cars have squeezed margins. The result also took a SEK 1.1 billion hit from a revaluation of CAFE credits following legislative changes in the US, and SEK 0.9 billion from Polestar’s losses in the second quarter.
“However, in the short term, with severely challenged volumes, we need to reinforce our turnaround plan with additional decisive actions, lowering our break-even point and improving cash flows to make us more resilient,” says Håkan Samuelsson, President and CEO of Volvo Cars.
The job cuts will be made by ending consultant contracts, through natural attrition and through targeted exit packages. Volvo Cars will also adapt its blue-collar workforce to current volumes and keep reducing R&D costs. Once the measures are fully in effect by the end of 2027, indirect costs will be almost 25% lower than in 2024.
Manufacturing and purchasing will also be coordinated more closely with Geely. Volvo Cars will concentrate on five plants dedicated solely to Volvo, and for its plants in Chengdu and Ghent it is exploring multi-brand assembly with Geely. The company will also expand its common supplier base with Geely Group and use more common hardware parts in its cars.
Europe stands out as a brighter spot. Fully electric cars made up 45% of sales there in the quarter, and the new EX60 has received more than 50,000 European orders. The production ramp-up is taking longer than planned, however, because the car relies on new production technology, including cell-to-body. Volvo Cars plans 13 new cars by the end of 2030, three of which will be revealed in 2027.
