Swedish carmaker Volvo Cars plans to cut 2,500 jobs worldwide as it struggles with falling revenue, weaker electric-vehicle demand and intensifying competition in China.
The company announced the cuts on October 23 after reporting an adjusted operating loss of 3.7 billion Swedish kronor (approximately US$373 million) for the third quarter of 2026, compared with a profit of 5.8 billion kronor in the same period last year.
Around 2,000 of the planned job reductions will be in Sweden. The measures will include ending consultant contracts, relying on natural staff turnover and offering voluntary exit packages.
The announcement comes on top of approximately 3,000 job cuts announced in 2025, as Volvo seeks to reduce costs and improve profitability.
China weighs on performance
China remains a major challenge for the Swedish automaker. Volvo’s revenue in the country fell by almost half in the third quarter, reflecting difficult market conditions and strong competition from Chinese carmakers.
The company is also facing weaker demand in the United States, where tariffs are putting additional pressure on sales and margins.
Volvo, which is majority-owned by China’s Geely Holding, plans to cut a further 5 billion Swedish kronor in indirect spending and variable costs, with the savings expected to be realised by the end of 2027.
The company has also withdrawn its full-year sales and cash-flow guidance, citing a deteriorating market outlook.
A difficult transition for Nordic carmakers
Volvo’s latest restructuring highlights the pressure on established European carmakers as they compete with Chinese manufacturers in the electric-vehicle market.
The company is seeking to strengthen its position through cost reductions, closer cooperation with Geely and products tailored more specifically to regional markets.
For Volvo, the immediate challenge is to restore profitability while continuing to invest in new models and electric-vehicle technology.
Sources: Reuters
