Volvo Cars to cut 3,000 mainly office jobs amid falling sales, tariffs, and fierce global competition

Volvo Cars, the Sweden-based automaker owned by Chinese conglomerate Geely Holding, announced plans to cut approximately 3,000 jobs as part of a sweeping cost-cutting initiative amid mounting global automotive industry challenges.

The job cuts will mainly affect white-collar workers in Sweden, amounting to roughly 15% of Volvo’s office-based workforce. The company unveiled this decision following a broader $1.9 billion (18 billion Swedish kronor) “action plan” announced last month aimed at stabilising the business during what CEO Håkan Samuelsson described as a “challenging period” for the industry.

Volvo Cars, headquartered in Gothenburg with major production facilities in Sweden, Belgium, China, and the United States, faces multiple headwinds. These include the impact of US President Donald Trump’s 25% tariffs on imported vehicles, escalating raw material costs, and declining sales in key markets such as Europe and China.

The firm reported an 11% drop in global sales in April compared to the previous year, highlighting the urgency for strategic restructuring. “The actions announced today have been difficult decisions, but they are important steps as we build a stronger and even more resilient Volvo Cars,” Samuelsson said.

Volvo’s shift towards electric vehicles (EVs) also faces setbacks. In 2021, the company boldly pledged to become fully electric by 2030, but due to regulatory uncertainties and tariff pressures on EV imports in several markets, Volvo has since scaled back this ambition.

The company was acquired by Geely in 2010 after being sold by US automotive giant Ford, marking a significant moment in the industry’s shifting global ownership landscape.

Volvo’s announcement follows a similar move by Japanese automaker Nissan, which revealed plans earlier this month to cut 11,000 jobs worldwide and close seven factories. Nissan’s decision comes amid slumping sales in China and the US — its two largest markets — and the collapse of a proposed merger with Honda and Mitsubishi.

The automotive sector’s fierce competition is also underscored by Chinese EV giant BYD’s recent aggressive price cuts. BYD lowered prices on over 20 models, including its cheapest car, the Seagull EV, which now starts at just 55,800 yuan ($7,745; £5,700). This triggered price reductions from other Chinese manufacturers like government-owned Changan and Leapmotor, the latter backed by Stellantis, the owner of Chrysler.

These aggressive moves have rattled investor confidence, with shares of several Chinese carmakers plunging sharply following the announcements.

Notably, BYD has recently outpaced Tesla in European sales for the first time, according to car industry research firm Jato Dynamics — a landmark development signalling a shift in EV market dominance.

Volvo Cars’ job cuts add to a broader wave of industry-wide layoffs that have already resulted in around 20,000 job losses at the company over the past year — representing approximately 15% of its total workforce.

As the global motor industry grapples with tariffs, rising costs, and shifting consumer demand, legacy automakers like Volvo face an uncertain future. The company’s decisions to slash jobs and recalibrate its EV strategy reflect the harsh realities of an industry under siege, where survival depends on navigating complex geopolitical pressures and fierce competition from nimble, often state-backed rivals.