Volvo Cars, the Swedish automaker majority-owned by China's Geely, said on Friday it would cut around 2,500 jobs globally as it reported a third-quarter net loss, underscoring the mounting pressure on European carmakers from trade barriers and intensifying competition in China.
The company posted revenue of 66.9 billion Swedish kronor (€6 billion) for the July-to-September period, down nearly 23 percent from the same time last year. It swung to a net loss of 5.7 billion kronor (€513 million), compared with a net profit of 4.5 billion kronor (€405 million) a year earlier.
Chief executive Håkan Samuelsson described the operating environment as “very tough,” citing “de-globalisation, hypercompetition and climate change” as the main external challenges. In response, Volvo announced an additional 5-billion-kronor (€450 million) savings programme on top of earlier cost-cutting measures. The new plan is expected to result in roughly 2,000 job cuts in Sweden and 500 elsewhere, achieved through ending consultant contracts, natural attrition, and targeted exit packages for employees.
The company said it expects the full financial benefits of these measures to materialise by the end of 2027.
EV bet under pressure
Volvo had bet heavily on electric vehicles, but the removal of consumer incentives for fully electric cars and plug-in hybrids in the United States under President Donald Trump has hit its margins. In 2024, the company abandoned its goal of selling only fully electric cars by 2030.
“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,” Samuelsson said.
The Swedish group is not alone in feeling the strain. European automakers are grappling with a difficult global landscape, including the rise of Chinese brands that have been gaining ground at events like the Paris Motor Show. Volvo's parent company, Geely, has also been facing intense competition from domestic rivals in China, where the market has become increasingly crowded and price-sensitive.
Last year, Volvo announced an 18-billion-kronor (€1.62 billion) cost-cutting plan that included around 3,000 job cuts worldwide. The latest measures bring the total announced reductions to more than 5,000 positions over two years.
The company's difficulties reflect broader challenges for the European automotive sector, which is also dealing with overcapacity and the need for partnerships to remain competitive. Analysts note that the transition to electric vehicles has proven more costly and slower than many anticipated, while trade tensions and shifting government policies add further uncertainty.
Volvo's shares fell in Stockholm trading after the announcement, as investors weighed the scale of the losses and the long timeline for recovery. The company said it remains committed to its long-term strategy, but the immediate focus is on reducing costs and improving cash flow to weather the current storm.
