Volvo to cut 2,500 jobs as shares fall nearly 30%
Volvo Cars has announced a sweeping cost-cutting programme that will eliminate around 2,500 jobs worldwide. The Swedish carmaker posted an operating loss of €340 million in the third quarter of 2026, while revenue in China fell by almost half. The disappointing financial results triggered a sharp stock market reaction, with Volvo shares losing nearly 30% of their value in a single day.
2,000 jobs to go in Sweden
According to Volvo Cars' financial report, the cuts mainly affect office staff and external consultants. Around 2,000 positions will be eliminated in Sweden and the remaining 500 elsewhere in the world. The company is reducing staffing by terminating consultancy contracts, through natural attrition and by offering voluntary severance packages. The new cuts come on top of the 3,000 job reductions announced in 2025. Volvo aims to save an additional €460 million a year. By the end of 2027, the company's indirect costs are expected to be almost a quarter lower than in 2024.
Chinese competition eats into profits
Volvo's third-quarter revenue fell year on year from SEK 86.4 billion to SEK 66.9 billion, or approximately €6.2 billion.
An adjusted operating profit of SEK 5.8 billion turned into a loss of SEK 3.7 billion, or approximately €340 million. The profit margin fell from 6.7% to minus 5.6%.
The most acute problem is in China, where local electric car manufacturers are putting pressure on European luxury brands with increasingly aggressive pricing. Volvo's revenue in China fell by nearly 50% year on year. In the US market, import tariffs and the withdrawal of electric car purchase incentives are hurting profitability. Higher raw material costs, losses related to Polestar and a slower-than-expected increase in production volumes for the EX60 electric SUV added to the burden.
Volvo chief executive Håkan Samuelsson acknowledged that the year had proved considerably more difficult than the company had initially forecast. According to Reuters, Volvo shares fell nearly 30% after the results were released.
Volvo bets on 13 new models
Despite its financial difficulties, Volvo does not intend to freeze product development. The company plans to unveil 13 new cars by the end of 2030, three of which will make their debut in 2027. In Europe, Volvo is focusing on electric cars, which accounted for 45% of its sales in the third quarter. The EX60 has attracted more than 50,000 orders in Europe, but the introduction of new production technology is initially slowing the ramp-up in output. Volvo will begin producing the XC60 for the US market at its Charleston plant in the first quarter of 2027. In China, the company is strengthening cooperation with its parent company, Geely, and is considering using shared production lines in China and Belgium.
For European buyers, the change in strategy primarily means a stronger focus on electric and plug-in hybrid models. Volvo must, however, find a way to reduce production costs without compromising on quality or technology.
Volvo's problem is not a lack of demand for electric cars in Europe, but the fact that strong European sales can no longer offset China's price war and difficulties in the US market. Making greater use of Geely's technology and manufacturing capacity could reduce costs, but would also increase Volvo's dependence on its Chinese parent company.
