Volvo Cars to cut 2,500 jobs as China slump fuels Q3 loss

Volvo Cars said on Friday, October 23, that it will cut about 2,500 jobs, 2,000 of them in Sweden, under a new 5 billion kronor savings plan after falling to a third-quarter loss that was much deeper than analysts expected. Its shares dropped almost 30% to a record low. Chief executive Håkan Samuelsson said the market for Western-developed cars in China is disappearing faster than the company had expected.cnbc.com

The cuts make Volvo's turnaround harder. The Geely-controlled carmaker is now dealing with a collapse in China, US tariffs and the end of US electric-vehicle incentives at the same time.

A steep quarterly loss

Third-quarter revenue fell nearly 23% to 66.9 billion kronor, and Volvo posted a net loss of 5.7 billion kronor, compared with a net profit of 4.5 billion kronor a year earlier. Its adjusted operating loss was 3.7 billion kronor. Citi analysts said the consensus forecast had been a loss of 724 million kronor. Gross margin fell to 14.7% from 20.4%. Shares fell as much as 31% during the session.investing.com+3

According to the company's earnings release, revenue in China fell almost 50% as legacy premium brands faced "hypercompetition" from Chinese rivals. In the US, Volvo said tariffs and the removal of incentives for electric and plug-in hybrid cars under President Donald Trump squeezed its margins.uk.finance.yahoo.com+1

Cuts and a China rethink

The job cuts amount to about 6% of the workforce. They come on top of 3,000 job reductions announced earlier and will be carried out by ending consultant contracts, not filling roles when people leave, and offering targeted exit packages. Samuelsson said the cuts should be done by mid-2027 but did not rule out further measures if the turnaround falls short. Earlier this month, Volvo withdrew its full-year guidance for sales volume and cash flow.detroitnews.com

"The possibility to sell Western-developed cars in China is more or less gone," Samuelsson told Bloomberg Television. He told CNBC that in China "the change has come faster than we thought" and that Volvo needs "regionally adapted cars" that share platforms and software with Geely. The company plans to show the first two of six China-specific models in mid-2027.cnbc.com+2

Samuelsson is due to step down next year. Klaus Zellmer, head of Volkswagen's Skoda Auto, will take over no later than October 2027.uk.finance.yahoo.com