Volvo Cars to cut 2,500 jobs after quarterly loss of 5.730 billion kronor
Key Facts
Volvo Cars said it would cut about 2,500 jobs worldwide, including 2,000 in Sweden, after posting a net loss of 5.730 billion Swedish kronor in the third quarter of 2026, compared with a profit of 4.511 billion a year earlier. The company said the cuts would be implemented through ending consultant contracts, natural attrition and targeted exit packages. The announcement came as quarterly revenue fell 22.6% to 66.896 billion kronor from 86.439 billion in the same period. Earnings per share showed a loss of 1.63 kronor, after a profit of 1.75 kronor a year earlier. Chief Executive Håkan Samuelsson described the quarter as "extremely disappointing" and said the transformation plan needed decisive reinforcement.
The figures reflect pressure on Volvo's performance in key markets, as the company attributed its operating loss to adverse market developments, particularly in China and the United States. Its revenue in China fell by about 50% during the quarter, while Reuters cited Chinese competition, tariffs and weak U.S. demand among the factors weighing on performance. Global sales fell 10.7% to 141,609 cars, according to company data. In Greater China, deliveries dropped 40.6% to 20,284 cars, while sales in the Americas fell 14% to 30,777 cars. The divergence across regions shows the downturn affected markets that are significant to the company's sales, with a clear variation in the scale of the declines.
Weak revenue coincided with a decline in gross margin to 14.7% in the third quarter from 20.4% a year earlier, weighing on the company's ability to convert sales into profit. As part of efforts to strengthen its action programme, Volvo is targeting an additional 5 billion kronor in indirect and variable cost savings by the end of 2027. The target places the job cuts within a broader plan to reduce the cost base, as the company faces a downturn in China and pressure in the United States. Volvo announced an 18 billion kronor cost and cash action plan in May 2025, which included cutting about 3,000 jobs worldwide, including consultants. The latest announcement adds another declared reduction to the restructuring drive launched under that earlier plan.
The company withdrew its full-year sales volume and cash flow guidance earlier in October, citing a challenging market and a deterioration in near-term outlook. On October 2, it said it would not meet its previous 2026 forecasts for volume and cash flow and would not provide updated short-term guidance because of uncertainty. This leaves investors without the previous full-year forecasts as the company cuts jobs and seeks additional savings. Volvo is scheduled to publish its fourth-quarter 2026 report on February 4, 2027, at 07:00 Central European Time. The report will be the company's next announced financial milestone after the loss-making quarter.