Swedish carmaker Volvo Cars has announced plans to cut 2,500 jobs worldwide after recording a quarterly loss, as US tariffs and competition from Chinese manufacturers weigh on its business.
The company’s shares fell by more than 25 per cent on the Stockholm stock exchange on Friday following the announcement.
Volvo Cars, controlled by China’s Geely group, reported revenue of 66.9 billion kronor ($6.7bn) for the third quarter, down nearly 23 per cent from the same period last year.
It recorded a net loss of 5.7 billion kronor, compared with a profit of 4.5 billion kronor a year earlier.
The company said its new five-billion-kronor savings plan would result in about 2,000 job cuts in Sweden and another 500 elsewhere through natural attrition and targeted exit packages.
Volvo currently employs about 39,300 people worldwide, including 19,500 in Sweden.
Chief Executive Officer Hakan Samuelsson said the company was operating in a difficult environment marked by trade barriers, intense competition and other external pressures.
He described the third-quarter performance as very disappointing, citing particular difficulties in the United States and China.
In China, revenue fell by nearly 50 per cent year-on-year as local electric vehicle manufacturers intensified competition against established premium brands.
In the United States, Volvo said tariffs and the removal of consumer incentives for electric vehicles under President Donald Trump had put further pressure on its profit margins.
The company had previously pursued an ambitious electric vehicle strategy but abandoned its plan in 2024 to sell only electric vehicles by the end of the decade.
Samuelsson said Volvo remained confident in its long-term strategy but needed further measures to reduce costs, improve cash flow and make the business more resilient.
The latest cuts follow previous restructuring efforts. Volvo announced an 18-billion-kronor cost-saving plan last year and said in May 2025 that it would eliminate 3,000 jobs. It also cut 1,300 positions in Sweden two years earlier.
Analyst Hampus Engellau of Handelsbanken said the company was facing difficult market conditions as well as challenges of its own, including difficulties increasing production of its new EX60 electric vehicle.
Although the model has attracted more than 50,000 orders in Europe, Volvo has struggled to expand production as quickly as planned.
The company also confirmed that Samuelsson would leave when his contract expires, with Skoda Auto chief executive Klaus Zellmer expected to replace him no later than October 2027.
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