Swedish company Volvo Cars has announced that it will cut 3,000 jobs, or about 15% of its office workforce. The measure is part of a $1.9 billion cost-cutting plan announced last month amid difficult market conditions.

The carmaker, owned by China's Geely Group, said the cuts were aimed at “building a stronger and even more sustainable Volvo Cars at a time when the automotive industry is facing significant challenges in its external environment.”

Of the 3,000 jobs to be cut, around 1,200 are in Sweden, as well as 1,000 consultants based mainly in the Scandinavian country, Volvo Cars said.

“The automotive industry is in the midst of a difficult period. To cope with this, we need to improve our cash flow generation and reduce our structural costs,” said CEO Håkan Samuelsson.

Announcing the cost-cutting plan in April, he explained that Volvo Cars must adapt to a “more regionalized world,” referring to the trade war between China and the United States.

The Swedish group has to cope with higher tariffs on cars manufactured outside the US, which have been subject to a 25% tariff since the beginning of April.

In early April, Volvo Cars announced that it would increase its production in the US and would likely produce an additional model there.

At the end of April, the company also opened a new production line at its plant in Ghent, Belgium, for the small electric SUV EX30.

As a result of the announced job cuts, Volvo Cars said it expects to incur one-time restructuring costs of up to SEK 1.5 billion ($158 million), which will be recorded in the second quarter report.

At the end of December 2024, Volvo Cars had approximately 42,600 full-time employees. | BGNES