Volvo Cars will cut 3,000 jobs—mostly in Sweden—as it scrambles to offset falling profits, U.S. tariffs, and a cooling electric vehicle market.
At a Glance
- Volvo Cars to eliminate 3,000 office jobs, or 15% of its salaried workforce, primarily in Sweden
- The move is part of a $1.89 billion global cost-cutting strategy after profits plunged in Q1 2025
- Volvo faces new 25% U.S. tariffs on vehicles made outside America, forcing shifts in global production
- EV market softening prompted Volvo to adopt a more flexible electrification strategy
- CEO says company is in a “challenging period” and must cut costs to stay competitive
Swedish Cuts Reflect Global Stress
Volvo Cars announced a sweeping round of job cuts on May 24, signaling a strategic shift for the iconic Swedish automaker as it adapts to an increasingly turbulent global auto market. The company will eliminate 3,000 office jobs, including 1,200 employee roles and 1,000 consultants—nearly all based in Sweden. The reduction is part of an $1.89 billion cost-savings plan initiated after a sharp drop in first-quarter profit.
“This has been a difficult decision, but we must build a stronger and more resilient Volvo Cars,” said CEO Håkan Samuelsson. The company has initiated talks with labor unions and issued formal notices to Swedish authorities about the pending layoffs.
Watch a report: Volvo’s Cost-Cutting Crisis
Trade Tensions and EV Headwinds
Volvo’s financials reflect a challenging landscape. Q1 profits plummeted to 1.9 billion kronor from 4.7 billion the year before. Revenue fell 12% year-over-year, pressured by reduced sales volumes and currency fluctuations.
Compounding the pressure are 25% U.S. tariffs on cars made outside North America, implemented amid renewed China-U.S. trade friction. In response, Volvo is ramping up U.S. production and evaluating whether to expand American manufacturing lines to include new models. The company is also adding an assembly line in Belgium to build the electric EX30 SUV for European markets.
Reshaping the EV Roadmap
Volvo’s job cuts also underscore its rethinking of EV goals. While still committed to an electric future, the automaker has dropped hard timelines for phasing out gas-powered vehicles. Instead, it’s adopted what Samuelsson described as a “pragmatic and flexible” approach—acknowledging slower-than-expected demand and regulatory uncertainty.
Volvo has also withdrawn its financial guidance for 2025 and 2026, citing volatility from tariff policies and supply chain constraints. As of December 2024, Volvo employed roughly 42,600 workers globally—making the 3,000 planned cuts one of its largest restructurings in over a decade.
As the global auto industry shifts toward electrification and geopolitical fragmentation, Volvo’s latest move is both a warning and a blueprint: adapt fast, or get left behind.
