Volvo has confirmed plans to cut approximately 2,500 jobs globally, attributing the move to pressure from Chinese brands and US tariffs. Around 2,000 of these roles will be based in Sweden, with the company planning to end consultant contracts and introduce targeted exit packages for employees.
About 6% of the company's workforce will be affected, with this latest round following 3,000 redundancies announced last year. The decision comes after the Q3 earnings report revealed a worse-than-expected operating loss of around £279 million over the last quarter.
External challenges and market pressures
Volvo said its financial position reflects a further deteriorating external environment, led by market developments in China and the USA. In China, Volvo and other legacy premium brands are facing "hypercompetition" from new brands, as well as "severe pricing pressure", which led to revenues in China falling by almost 50% year-on-year.
Meanwhile, in the US market, Volvo saw continued negative effects from tariffs and the removal of consumer incentives for electrified cars.
Turnaround plan and product push
Håkan Samuelsson, president and CEO of Volvo, stressed that the latest cuts should be completed by mid-2027. However, he has not firmly ruled out further measures if the turnaround plan is not enough.
Samuelsson said: "We continue to operate in a very tough environment with strong external challenges: de-globalisation, hypercompetition and climate change. We are convinced that we have the right long-term strategy addressing these challenges.
"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."
Volvo is set for its largest-ever product push, with 13 new cars set to be released by the brand between now and the end of 2030. This will include a tailored portfolio of new cars for Europe, the US and China as well as more localised production. In 2027, Volvo plans to reveal three of these new models: one in Europe and two China-specific models.
