Volvo Cars Announces Major Workforce Reduction Amid Restructuring Efforts

 

Volvo Cars has announced plans to cut 3,000 jobs, primarily affecting white-collar positions, as part of a broader restructuring initiative. The Swedish automaker, owned by China's Geely Holding, is implementing these reductions to address rising costs, declining electric vehicle demand, and global trade uncertainties.  

The layoffs will impact approximately 15% of Volvo's office-based workforce, with the majority occurring in Sweden. The company had previously unveiled an 18 billion Swedish kronor ($1.9 billion) cost-cutting plan in April, signaling that job losses were inevitable.  

CEO Håkan Samuelsson emphasized the necessity of these measures, stating that Volvo must improve cash flow and lower costs to navigate the challenges facing the automotive industry. The company also withdrew its financial guidance for 2025 and 2026, citing unpredictable market conditions and tariff pressures.  

Despite the restructuring, Volvo remains committed to its long-term vision of becoming a fully electric carmaker. However, recent shifts in consumer demand have prompted the company to adopt a more flexible approach to its EV strategy.  

This move comes as the global automotive sector grapples with escalating trade tensions, particularly in the wake of potential 50% U.S. tariffs on European imports, which could significantly impact Volvo's ability to export certain models.  

The restructuring is expected to be completed by autumn 2025, with Volvo aiming to stabilize operations while maintaining its commitment to innovation and sustainability.