Volvo car plans to cut 3,000 jobs after profit plunge

Volvo EX90

Volvo Car AB plans to eliminate around 7% of its global workforce as the Swedish carmaker cuts costs to counter muted demand and protect profits. The move will affect around 3,000 positions, including 1,000 consultants, Volvo said Monday. The manufacturer employs around 43,800 people, more than half of them in Sweden.

Volvo will incur restructuring costs of as much as 1.5 billion Swedish kronor ($140 million) that will impact the company’s second-quarter results.

Chief Executive Officer Hakan Samuelsson is pushing through a sweeping 18 billion kronor efficiency program after Volvo reported a 60% plunge in first-quarter operating income. The measures, announced last month, are meant to stabilize the automaker as it contends with rising trade barriers and uneven demand for electric vehicles.

Volvo’s shares rose as much as 4.9% in Stockholm. The stock is down around a quarter this year.

Samuelsson in an interview on Friday dismissed worries that the cuts should be seen as a sign that the carmaker’s Chinese owner was looking to take more control over product development and shift jobs in R&D to China. Backed by a firm mandate from Zhejiang Geely Holding Group’s founder, Li Shufu, 74-year-old Samuelsson is tasked with enforcing tighter integration and extracting synergies across the broader Geely group.

He has already replaced his chief financial officer and plans to give the China and US regions more autonomy to react faster to local customer preferences. As part of the efficiency program unveiled last month, Volvo aims to reduce material expenses, personnel costs and investments.

The most recent cuts affect 1,200 employees in Sweden, 1,000 posts currently filled by consultants — most of them also in Sweden — and the remainder in other markets, the company said.

The move is “critical for us to create a structurally more efficient and resilient” company, CFO Fredrik Hansson said in an interview.

The last time Volvo announced workforce reductions was in 2023, when it warned that as many as 1,300 white-collar jobs in Sweden were at risk. Eventually, the company eliminated around 700 positions, a spokesperson said Monday.