Another 2500 Volvo jobs will be up on the chopping block, with the Swedish automaker, majority owned by China’s Geely, reporting a third-quarter operating loss far exceeding market expectations, adding to pressure on the company as it battles weak electric vehicle demand, tariffs and difficult market conditions in China.
The arrival of the disappointing numbers also coincides with Volvo’s desperate attempt to restore profitability through cost reductions, closer cooperation with Geely and a strategy focused on regionalising production and operations.
Volvo Cars reported an operating loss of 3.7 billion Swedish crowns (USD 373 million) for the third quarter, compared with an operating profit of 5.8 billion crowns a year earlier.
Chief executive Hakan Samuelsson, who returned from retirement in 2025 on a two-year contract to turn around the company, has already undertaken extensive cost-cutting measures and restructuring efforts.
Still, Volvo told the investors that it needed to reduce costs by a further five billion crowns.
The latest axing of 2,500 roles will affect approximately 6% of Volvo Cars’ workforce, including around 2,000 positions in Sweden.
The reductions will be implemented through the termination of consultant contracts, natural attrition and targeted exit packages.
The measures come on top of 3,000 job cuts announced previously, for which Samuelsson has announced a mid-2027 deadline.
Former Skoda chief Klaus Zellmer, who is due to succeed Samuelsson next year, will inherit the task of stabilising one of Europe’s best-known automotive brands.
Volvo’s recovery plans have also been complicated by delays affecting the EX60, an electric version of its best-selling XC60 and a central model in the company’s turnaround strategy.
The production of vehicles has slowed down due to the battery assembly problems.
Volvo has built only around 5,000 units of the planned 40,000 for this year, raising concerns about the timing of deliveries and the model’s contribution to the company’s recovery.
The automaker scrapped its full-year sales volume and cash flow guidance this month, reflecting mounting uncertainty over its business outlook.
In China, Volvo has decided to prioritise margins over market share rather than participate in an intensifying price war with domestic manufacturers.
The decision comes as competition remains fierce and demand conditions prove difficult for foreign automakers in the world’s largest vehicle market.
Volvo’s third-quarter revenue fell nearly 50%, while its gross margin declined to 14.7% from 20.4% a year earlier.
Volvo plans to launch 13 models by the end of the decade, with six specifically designed for China.
However, Samuelsson does not expect the group’s performance in the world’s largest automobile market to improve until those vehicles begin arriving.
The outgoing CEO has also flagged Volvo’s inability to proactively respond to changes in regional markets, including rising trade barriers and the need to localise production.
The company is now seeking to expand its regional approach in China and increase localisation in the United States to address tariff pressures.