Volvo Cars plans to cut approximately 2,500 jobs globally and reduce expenditure by Skr5bn ($503.1m) after reporting an operating loss in the third quarter of 2026.
The Geely-owned carmaker said it is operating in a “very tough environment” as market conditions are worsening in China and the US.
About 2,000 of the planned job reductions will be in Sweden.
The cuts will be made through the end of consultant contracts, natural attrition and targeted exit packages.
Volvo Cars expects the programme to deliver its full financial effect by the end of 2027, reducing total indirect expenditure by almost 25% against fiscal year 2024.
The cost reduction initiative follows operational contraction during the period.
Group revenue fell 22.6% to Skr66.89bn in the third quarter, from Skr86.43bn in the third quarter of 2025.
The company recorded an operating loss of Skr5.59bn, compared with an operating profit of Skr6.43bn a year earlier.
Net loss for the period was Skr5.73bn, against net income of Skr4.51bn.
Car sales experienced an 11% downturn, dropping to 141,300 units from the 158,500 vehicles recorded in the previous quarter.
In China, revenue declined by almost 50% year on year amid pricing pressure and competition from domestic producers.
In the US, import tariffs and the removal of consumer incentives for electrified vehicles affected profitability.
The period also included higher raw material costs, a Skr1.1bn write-down of Corporate Average Fuel Economy (CAFE) credits linked to US legislative changes, and a Skr0.9bn impact from recognised losses at Polestar.
CAFE standards regulate the average fuel efficiency of a carmaker’s vehicle fleet.
Volvo Cars is concentrating vehicle assembly at five dedicated plants globally. It is also assessing multi-brand assembly with Geely at facilities in Chengdu, China, and Ghent, Belgium.
The company plans to reduce variable costs by using common hardware components and expanding its shared supplier network with Geely Group.
Volvo Cars president and CEO Håkan Samuelsson said: “We continue to operate in a very tough environment with strong external challenges: de-globalisation, hypercompetition and climate change. We are convinced that we have the right long-term strategy addressing these challenges.
“However, in the short term, with severely challenged volumes, we need to reinforce our turnaround plan with additional decisive actions, lowering our break-even point and improving cash flows to make us more resilient.”
