Volvo Cars has reported a third-quarter operating loss and announced plans to cut 2,500 jobs globally as the Swedish automaker faces intense competition in China, US tariffs, and weakening demand for electric vehicles.
The company, majority-owned by China's Geely Holding, recorded an adjusted operating loss of 3.7 billion Swedish crowns (USD 373 million) for the third quarter of 2026, compared with a profit of 5.8 billion crowns in the same period last year.
Volvo Cars said it would reduce costs by an additional 5 billion crowns through cuts in indirect spending and variable costs. The measures are expected to take full effect by the end of 2027.
The planned job cuts will affect approximately 2,500 employees globally, including 2,000 positions in Sweden. The company plans to reduce its workforce by ending consultant contracts, relying on natural attrition, and offering targeted exit packages.
The latest reductions follow Volvo's announcement of 3,000 job cuts in 2025 as part of an earlier cost-cutting program worth 18 billion crowns.
Chief Executive Hakan Samuelsson described the third quarter as ‘very disappointing,’ saying the year had become more challenging than initially anticipated. He said the company's turnaround plan required additional decisive measures.
Volvo Cars has faced mounting pressure in China, where revenue fell by almost 50% year-on-year during the quarter. The company and other established premium brands are confronting intense competition from Chinese automakers and significant pricing pressure.
In the United States, tariffs and the removal of consumer incentives for electrified cars have continued to weigh on margins.
The company's gross margin fell to 14.7% in the third quarter, down from 20.4% a year earlier. Volvo had also withdrawn its full-year sales volume and cash-flow guidance earlier this month, citing a deteriorating market outlook.
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Volvo Cars shares hit a record low this week and have fallen 54% so far this year, amid concerns about tariffs, weaker electric-vehicle demand, and high development costs.
Samuelsson said the company needed to lower its break-even point and improve cash flow to become more resilient. Volvo plans to focus on regional product strategies and cost efficiency as it navigates the challenging market environment.