Volvo Cars, the Swedish automaker largely owned by China’s Geely Holding, announced a significant restructuring today, revealing plans to cut approximately 3,000 jobs worldwide. The move is part of an aggressive $1.9 billion cost-cutting initiative aimed at bolstering the company’s financial resilience amidst a challenging automotive landscape, marked by a slowdown in electric vehicle (EV) demand and persistent macroeconomic uncertainties.
The job reductions, primarily affecting office-based staff in Sweden, represent roughly 15% of Volvo’s global white-collar workforce. Approximately 1,200 employee roles and 1,000 consultant contracts in Sweden will be terminated, with the remaining cuts distributed across the company’s international operations.
Despite reporting a record-breaking year in 2024 with core operating profits of SEK 27 billion ($2.8 billion) and global sales hitting an all-time high of 763,389 vehicles, Volvo is facing mounting cost pressures. The company cited macroeconomic uncertainty, supply chain volatility, and the substantial capital expenditure required for its ambitious electrification goals as key drivers behind the decision.
“The automotive industry is in the middle of a challenging period,” stated Håkan Samuelsson, Volvo Cars President and CEO, who has returned to lead the company. “To address this, we must improve our cash flow generation and structurally lower our costs. These have been difficult decisions, but they are important steps as we build a stronger and even more resilient Volvo Cars.”
The restructuring comes as Volvo, like many automakers, navigates a more turbulent-than-expected transition to electrification. The company reported a 32% drop in pure EV sales in April compared to the same period last year, contributing to an overall 11% decline in global sales for the month. In response, Volvo has announced a revision of its electrification strategy, emphasizing the need for flexibility in its product offerings to adapt to fluctuating demand.
This significant cutback is expected to incur a one-time restructuring cost of approximately 1.5 billion Swedish kronor ($156 million) in the second quarter of 2025, with financial benefits from the move anticipated to materialize from Q4 2025 into 2026. Volvo’s shares experienced a slight uptick following the announcement, though they remain down for the year.
The job cuts also come amidst renewed threats of higher tariffs on European goods from the United States, with President Donald Trump recently proposing a 50% duty on all EU imports. With most of its production based in Europe and China, Volvo Cars is particularly exposed to such trade tensions, having previously warned that new U.S. tariffs could make it impossible to export some of its more affordable cars to the American market.
Volvo aims to complete the structural reorganization by autumn. While the company reaffirms its long-term ambition to become a fully electric carmaker, the job cuts underscore the tough decisions facing the automotive industry as it strives to balance ambitious transformation targets with the evolving realities of global demand and economic headwinds.