Mikael Sjoberg | Bloomberg | Getty Images
Sweden-based automaker Volvo Cars on Monday said it would cut around 3,000 jobs as part of a major cost-cutting drive.
The move comes after the company, which is owned by China’s Geely Holding, announced an 18 billion Swedish kronor ($1.89 billion) cost and cash action plan late last month.
Volvo Cars said the 3,000 job cuts would primarily impact office-based positions in Sweden and represent around 15% of the firm’s total office-based workforce.
“The actions announced today have been difficult decisions, but they are important steps as we build a stronger and even more resilient Volvo Cars,” Håkan Samuelsson, Volvo Cars president and CEO, said in a statement.
“The automotive industry is in the middle of a challenging period. To address this, we must improve our cash flow generation and structurally lower our costs. At the same time, we will continue to ensure the development of the talent we need for our ambitious future,” Samuelsson said.
As part of the redundancies, the company said it would reduce around 1,000 positions currently held by consultants, mostly in Sweden, roughly 1,200 employees in Sweden and the remaining in other global markets.
When the action plan was launched on April 29, Volvo Cars said the program would include reductions in investments and redundancies at its operations across the globe. The company also withdrew its financial guidance for both 2025 and 2026, citing tariff pressure on the automotive sector.
Uncertainty over trade tariffs is expected to have a profound impact on the car industry, particularly given the high globalization of supply chains and the heavy reliance on manufacturing operations across North America.
Volvo Cars said the measures were necessary to ensure it can deliver on its long-term strategy, adding that it remains firm on its ambition to become a fully electric car company.
A leader in the electric vehicle (EV) transition, Volvo Cars announced plans in September to drop its near-term goal of selling only EVs, citing a need to be “pragmatic and flexible” amid changing market conditions and cooling demand.