Swedish automaker Volvo Cars AB has announced plans to cut around 3,000 jobs globally as part of a major cost-cutting “action plan”.
The move will affect approximately 7% of total workforce, including 1,000 consultants, the company said on Monday. Volvo currently employs about 43,800 people, more than half of whom are based in Sweden.
The company added that around 1,200 employee-held positions will be cut from its Swedish operations (Volvo Personvagnar AB).
“Volvo Cars has initiated negotiations with the relevant labour unions and will issue a notice for these office-based positions to the Swedish Public Employment Service (Arbetsförmedlingen) today,” the automaker said.
An additional 1,000 roles currently filled by consultants—most of them in Sweden—will also be eliminated.
The exact number of reductions in other countries will be determined following a full organisational review, Volvo Cars added. The company aims to complete these structural changes by autumn 2025.
“The actions announced today have been difficult decisions, but they are important steps as we build a stronger and even more resilient Volvo Cars,” said Håkan Samuelsson, President and CEO. “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.”
Layoffs Follow Weak Q1 Results
Volvo Cars, owned by China’s Geely Holding, reported a sharp drop in earnings for the first quarter of 2025. Operating profit fell to 1.9 billion Swedish kronor from 4.7 billion kronor in the same period last year.
The EBIT (earnings before interest and taxes) margin declined to 2.3%, down from 5% in Q1 2024. Revenue also dropped to 82.9 billion kronor, compared to 93.9 billion kronor a year earlier.
The company attributed the weaker performance to a planned reduction in wholesale volumes to manage inventory levels during Q4 2024, unfavourable currency movements, and continued pressure across the global auto industry.
In response, the automaker launched an 18 billion kronor (approx. $1.87 billion) cost-saving initiative in April and withdrew its financial guidance, citing the significant fall in profit and heightened market uncertainty.
The new “cost and cash action plan” will involve reduced investment and layoffs across its global operations. While the exact number of redundancies is still being finalised, Volvo said more details would be shared soon.
The company also confirmed it will no longer issue financial forecasts for 2025 and 2026, citing growing pressure from global tariffs.
Following the announcement on 26 May, Volvo Cars expects to incur a one-time restructuring charge of up to 1.5 billion kronor. This will be reflected in its Q2 2025 results, with the financial impact expected to extend into Q4 2025 and 2026.
