Swedish car manufacturer Volvo Cars announced on Monday (May 26th) that it will cut around 3,000 jobs globally, mainly targeting white-collar workers, which accounts for about 15% of its total office employees. This move is part of the restructuring plan the company unveiled last month to address weak demand for electric vehicles, high operational costs, and trade uncertainties.
According to Volvo, about three-quarters of the job cuts will be in Sweden, with the rest coming from other global markets, including 1,000 consultant positions, most of which are also in Sweden. The company estimates that this restructuring will incur up to 1.5 billion Swedish kronor (approximately 140 million dollars) in costs and will impact its second-quarter performance.
As of the first quarter, Volvo had 43,500 full-time employees and 3,000 temporary workers, with over 40% being white-collar workers. In the first quarter of this year, the company’s operating profit decreased by 60%, prompting management to significantly reduce manpower, materials, and capital expenditures. CFO Fredrik Hansson stated that this action is a key step in “achieving structural efficiency and resilience” for the company.
Due to the majority of Volvo Cars’ production being in Europe and China, the company is more vulnerable to the impact of new U.S. tariffs compared to many European competitors. The company has warned that some lower-priced models may no longer be exportable to the United States.
Owned by Chinese Geely Holding Group, the Volvo Group announced a plan on April 29th to cut costs by 18 billion Swedish kronor (1.9 billion dollars) and halt investments, warning that layoffs were inevitable. CEO Hakan Samuelsson emphasized that this move has nothing to do with Geely Holding’s desire to strengthen control over product development.
This marks Volvo’s largest workforce reduction since 2023. While they had previously announced the removal of up to 1,300 white-collar positions in Sweden that year, the actual execution only affected around 700 individuals.
Last week, U.S. President Donald Trump warned of imposing a 50% tariff on EU goods starting June 1st. However, following a call with EU Commission President Ursula von der Leyen, the negotiation deadline was extended to July 9th.
Despite operational challenges, Volvo’s stock price rose by 4.9% in Stockholm on Monday, closing up 3.7% at 18.20 Swedish kronor, yet overall declining by approximately 24% so far this year.