Car manufacturer: Volvo is cutting 2,500 jobs - shares temporarily collapse by more than 30 percent

Frankfurt. Volvo Car is cutting another 2,500 jobs worldwide. The Swedish car manufacturer announced this on Friday when it presented its quarterly figures. The reasons are the decline in sales in China and the tariffs in the USA, which are making the restructuring of the group more difficult.

The cuts represent around six percent of the global workforce. 2,000 jobs will be lost in Sweden. Volvo wants to save around five billion crowns (around 450 million euros) annually. The program comes on top of an earlier restructuring involving around 3,000 jobs.

The share temporarily fell by more than 31 percent to 9.70 crowns in Stockholm. In the morning, the shares rose slightly again, but were still 27 percent below the previous day's close. This year the paper has lost more than two thirds of its value.

Sales in China halve – also weak in the USA

CEO Hakan Samuelsson said in an interview with Bloomberg Television: “The possibility of selling cars developed in the West in China has more or less disappeared.” Deliveries in China fell by more than 40 percent in the third quarter. Sales there almost halved year-on-year. Local brands dominate in electric cars, and the overall market is shrinking due to a consumer crisis.

In the third quarter, Volvo reported an operating loss of 5.6 billion crowns, after a profit of 6.4 billion the previous year. Analysts had expected a significantly smaller loss. The bottom line was a loss of 5.7 billion crowns (513 million euros), a year ago a profit of 4.5 billion. Sales fell by almost a quarter to 66.9 billion crowns. Volvo delivered 11 percent fewer vehicles with around 141,300 cars.

“The third quarter was very disappointing,” Samuelsson wrote in the letter to shareholders. The weakness was evident not only in China, but also in the USA. This means that half of the group did not make any profit contribution. In the USA, import tariffs on EU cars and the loss of incentives to buy electric cars are having a negative impact. At the beginning of October, Samuelsson withdrew his annual outlook.

Volvo cancels forecast – shares fall significantly

Jefferies analyst Philippe Houchois wrote that Volvo's sales in China and the United States fell far short of expectations. The outflow of funds is significantly higher than feared and the company is heading towards net debt. JP Morgan analyst Jose Asumendi also spoke of a weak quarter.

Competition is also weakening

Volvo follows manufacturers like Volkswagen and BMW, which are also cutting costs to face Chinese competition. Mercedes-Benz, BMW and Audi also suffer from high competition and falling prices in China.

By the end of the decade, Volvo plans to launch seven new models for Western markets and six models tailored for China. The group also wants to make greater use of technology and other synergies with the owner Zhejiang Geely Holding. The relationship with Geely is a "huge advantage" when it comes to developing cars to suit Chinese customers' tastes, Samuelsson told Bloomberg TV.

In Europe, Volvo increased sales, although Chinese brands are also becoming stronger there. The EU's push to limit hybrid imports from China may just buy time as brands like BYD set up manufacturing in the region.

Samuelsson has been leading the group again since April 2025, after leading it for a decade until 2022. He is preparing the handover to the former Skoda boss Klaus Zellmer, who will take over on October 1, 2027 at the latest. The workforce fell to an average of around 39,300 employees in the first nine months, after 43,000 in the same period last year. The truck manufacturer Volvo AB has been separated from the car manufacturer for decades.