Volvo Plans 2,500 More Job Cuts After 3,000 Layoffs, Targets $500 Million Savings

Volvo Cars plans to cut another 2,500 jobs globally as the Swedish automaker steps up its cost-cutting drive, targeting savings of around $500 million amid intensifying competition, weakening demand and mounting pressure on profitability.

The latest round of layoffs follows the elimination of 3,000 roles earlier this year. The additional cuts will affect about 6% of the company's global workforce, with 2,000 of the positions based in Sweden. According to Reuters, the job reductions are expected to be completed by mid-2027.

The announcement comes as Volvo reported a disappointing third quarter, with operating losses widening and cash burn doubling year-on-year. Its shares fell 24.2% at the close of trading, hitting a record low, according to the report.

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The automaker, owned by China's Geely Holding, is facing mounting pressure as Chinese manufacturers strengthen their position in the global car market. Falling revenues, pricing pressures and uncertainty surrounding the transition to electric vehicles have added to the challenges facing premium carmakers.

Chief Executive Officer Hakan Samuelsson said the company's turnaround plan needed to be reinforced as business conditions deteriorated more sharply than expected.

“The third quarter of 2026 was very disappointing and reflects a year that has become far more challenging than originally anticipated. Our ongoing turnaround plan therefore needs a decisive reinforcement,” Samuelsson said, according to Reuters.

Speaking to CNBC's Squawk Box Europe, Samuelsson pointed to rapid changes in China, where consumers are increasingly turning to domestic brands rather than global models developed for multiple markets.

He said Volvo needed a more regionally focused strategy, giving local operations greater autonomy and developing vehicles tailored to Chinese customers.

The company is also looking to streamline its central administration and work more closely with its Chinese parent on software development, including infotainment and driver-assistance systems. Samuelsson said weak performance in the US and China meant that roughly half of Volvo's business was not contributing to profitability.

Samuelsson, who returned to the company on a two-year contract to lead its turnaround, has not ruled out further cost-cutting measures.

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Alongside the workforce reductions, Volvo has outlined plans to strengthen growth and improve profitability, including the launch of 13 new models by the end of the decade. Three are expected to be unveiled next year, including two vehicles specifically tailored for China.

Volvo's restructuring comes amid a broader downturn in the automotive industry. German carmaker BMW has considered cutting management positions, while Volkswagen has approved plans to eliminate another 50,000 jobs as part of an extensive restructuring programme.

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