Volvo Car AB has announced plans to slash 3,000 jobs globally, representing about 7% of its total workforce, in a bid to cut costs following a significant drop in profits and ongoing challenges in the electric vehicle (EV) market.
The job cuts, disclosed on Monday, will affect approximately 1,200 employees in Sweden and 1,000 consultant roles, most of which are also based in the country. The remaining cuts will impact operations in other global markets. In total, Volvo currently employs about 43,800 workers, more than half of whom are located in Sweden.
The restructuring is expected to cost as much as 1.5 billion Swedish kronor ($140 million) and will weigh on the company’s second-quarter financial results.
“This move is critical for us to create a structurally more efficient and resilient Volvo,” said CFO Fredrik Hansson in an interview.
The decision comes after the automaker reported a 60% plunge in first-quarter operating income, prompting the company to accelerate an 18 billion kronor efficiency program aimed at stabilizing operations amid sluggish EV demand, global trade disruptions, and increased cost pressures.
Despite the troubling earnings report, Volvo’s shares rose by as much as 4.9% in Stockholm, although the stock remains down roughly 25% year-to-date.
CEO Samuelsson Denies Geely Power Shift
Volvo CEO Hakan Samuelsson, backed by Geely Holding Group founder Li Shufu, is overseeing the cost-cutting strategy. He dismissed speculation that the workforce reduction reflects an effort by Geely to assert greater control over Volvo’s R&D by shifting operations to China.
Instead, Samuelsson emphasized plans to give regional operations in China and the US more autonomy to respond to local market needs. The restructuring also includes leadership changes, including the replacement of Volvo’s Chief Financial Officer.
Focus on Long-Term Efficiency
Volvo says the cuts will allow it to reduce material expenses, personnel costs, and capital investments, laying the groundwork for a more agile and cost-effective organization.
The latest round of layoffs follows a 2023 announcement in which up to 1,300 white-collar jobs in Sweden were at risk. At the time, the company ultimately eliminated around 700 positions.
As part of its new strategy, Volvo also intends to integrate more closely with other Geely-owned brands, boosting collaboration while maintaining brand independence.
