On Friday, October 23, 2026, Volvo Cars, controlled by China’s Geely Holding Group, announced a further layoff of 2,500 employees, with the majority of job cuts concentrated in Sweden. This decision came after the company reported a third-quarter operating loss far exceeding expectations, leading to a sharp drop of nearly 30% in the company’s stock price.
Volvo Cars reported an adjusted operating loss of 3.7 billion Swedish Krona (approximately $373 million) for the third quarter, significantly higher than the market’s anticipated loss of around 724 million Krona (approximately $73 million). This is in stark contrast to a profit of 5.8 billion Krona in the same period last year. The third-quarter adjusted gross margin stood at 14.7%, down from 20.4% a year ago, with overall revenue declining to 66.9 billion Krona ($6.75 billion), a decrease of around 23% year-on-year.
In addition to previously announced cost reductions of 23 billion Krona ($2.31 billion), the company plans to further cut indirect expenses and variable costs by 5 billion Krona ($500 million), with expected savings to be realized by the end of next year.
CEO Håkan Samuelsson told Reuters that the third-quarter performance in 2026 was very disappointing, reflecting challenges that surpassed initial expectations for the year. He emphasized the need for decisive reinforcement of the ongoing transformation plan.
The new measures by Volvo are projected to affect about 6% of its employees, including approximately 2,000 positions in Sweden, through the termination of consultant contracts, natural attrition, and targeted severance packages. These job cuts come on top of the previously announced reduction of 3,000 positions.
Samuelsson noted that the latest layoff plan is expected to be completed by mid-2027, with the possibility of further actions if the plan to return to profitability falls short.
Volvo’s stock price hit an all-time low this week, touching around 10.18 Swedish Krona at its lowest point, compared to a closing price of 14.12 Swedish Krona on the previous day, representing a cumulative decline of over two-thirds since its IPO at 53 Krona.
The company earlier withdrew its full-year sales and cash flow guidance in October, emphasizing a focus on profitability over market share in China and ruling out aggressive price competition with local rivals. Similar strategies will be implemented in the U.S. market.
Volvo’s retail sales in the Greater China region for the third quarter were only 20,284 vehicles, a significant 40.6% decline year-on-year, with revenue in China approximately 4.787 billion Swedish Krona, much lower than the 8.306 billion Krona in the same period last year. Additionally, sales volume in the Greater China region for the first half of the year stood at about 53,200 vehicles, a 27% decrease compared to the previous year.
Moreover, in September, Volvo made substantial price cuts on the S90 model in China, with prices starting from 406,900 RMB (approximately $60,900) before subsidies and discounts, reducing the selling price to around 220,000 RMB (approximately $33,000).
Despite a fourfold increase in sales from 388 vehicles in July to 1,554 vehicles in August for the S90 model, it still remains at a low level overall.
【Extended Reading: “Volvo S90 in China Sees Significant Price Reduction, Selling for as Low as 220,000 Yuan”】