Volvo Cars will cut 2,500 jobs, mostly in its home country of Sweden, as the group seeks to slash costs amid tough competition from Chinese automakers and as tariffs and weak demand hit U.S. sales.
The company, majority-owned by China’s Geely, reported an adjusted operating loss of 3.7 billion Swedish crowns (€333 million) for the third quarter, down from a profit of 5.8 billion crowns (€522 million)a year earlier.
Volvo said that, in addition to the previously announced 23 billion crowns (€2.1 billion) in cost cuts, it would further reduce indirect spending and variable costs by 5 billion crowns (€450 million), with the savings expected to be realized by the end of next year.
2,500 jobs
Volvo said in a statement that some 2,500 jobs will be lost globally, of which 2,000 are in Sweden, as the group ends consultant contracts, applies natural attrition, and offers “targeted exit packages” to employees.
The group has long struggled to stay profitable amid cooling demand for electric vehicles, tough conditions in China, where revenue fell by almost 50% in the third quarter, and the strain of high costs and tariffs.
“The third quarter of 2026 was very disappointing and reflects a year that has become far more challenging than originally anticipated. Our ongoing turnaround plan therefore needs a decisive reinforcement,” CEO Hakan Samuelsson said.
The latest measures will affect about 6 percent of Volvo’s workforce. Samuelsson told Reuters the latest cuts should be completed by mid-2027, although he did not rule out further measures if the turnaround plan falls short.
Volvo earlier this month scrapped its guidance for full-year sales volume and cash flow, citing an increasingly challenging market and a deteriorating near-term outlook.
The new layoffs add to the 3,000 job cuts announced shortly after Samuelsson returned as CEO in 2025, when Volvo tightened costs across the company with an 18 billion crowns (€1.6 billion) savings plan and deepened cooperation with Geely brands.
Volvo’s gross margin, a metric investors closely watch to gauge the impact of tariffs and discounting, came in at 14.7% in the third quarter, down from 20.4 % last year. The group’s share price hit a record low this week and is down 54% year-to-date, burdened by tariffs, weaker EV demand, and high development costs.
‘A reinforced turnaround plan with the right regional products’
“Reflecting its strong BEV position in Europe, the EX60 has been a big success with over 50,000 European orders, and it will be one of Volvo Cars’ most profitable models,” says Volvo. “Due to new industrial technology such as cell-to-body, it is taking longer than planned to ramp up production, but Volvo Cars is steadily improving built volumes,” the car manufacturer tries to explain the delays that occurred at the launch of this very important car.
“In 2027, Volvo Cars will introduce its next global BEV car, targeting a large, lower-priced market segment in Europe, with first customer deliveries starting after summer. This will further strengthen its BEV leadership and improve margins.3 Volvo is speaking of the EX40 successor here, mostly cited as the EX50 (see further).
In the U.S., Volvo Cars has divided the market into four regions to speed decision-making and boost sales. It is fast-tracking production of the long-range plug-in hybrid versions of the XC90 and XC60, with European deliveries starting this year and U.S. deliveries shortly after. In Q1 2027, it will localize XC60 production in Charleston. By the end of the decade, it will localize a second, all-new car with multiple powertrain options.
In China, the next two years will remain tough, so Volvo Cars is taking further cost-efficiency actions to weather the storm. For example, it will combine its two Shanghai offices by moving the sales office to the local HQ in Jiading.
“Mid-next year, Volvo Cars will reveal and start production of the first two of six new China-tailored cars, through closer cooperation with Geely. These cars will be developed with a Chinese tech stack and the latest ADAS technologies to make them fully competitive in China,” Volvo added.
Volvo EX50
As part of Volvo’s largest product offensive, the company plans to launch 13 new cars through the end of 2030. As said, Volvo will tailor all new vehicles to specific markets, including the U.S., Europe, and China. Volvo announced during its third-quarter earnings call on Friday that it will reveal three new vehicles in 2027. One will be for Europe, and the other two for China.
After the EX60, Volvo will launch its second electric car on the SPA3 platform. According to Volvo, the new model is “a global BEV car, which targets a large, lower-priced market segment” in Europe. The first customer deliveries are set to begin after next summer.
While the company didn’t reveal further details, the new vehicle is widely expected to succeed the current EX40 and be named EX50. Volvo filed a trademark with the European Union Intellectual Property Office (EUIPO) for EX50 in July. Although the filing revealed few details, it confirmed the car will be electric.
And what about Volvo Ghent?
Volvo can’t produce the EX50 in Ghent because it sits on a newer platform than the current EX40 and the smaller EX30. This means it will most likely be produced at the new factory in Košice, Slovakia. In the longer term, with the disappearance of the EX40, EC40, and later the XC40, Ghent will have plenty of capacity.
Volvo previously raised the possibility of contract manufacturing for other brands in Ghent. In August, Geely chairman An Conghui reportedly suggested that the Belgian plant could produce premium models from other Geely brands from 2028. Volvo declined to confirm that plan, but CEO Samuelsson nevertheless hinted at it.
On the positive side, Ghent would become a European production hub for several Geely brands, increasing factory utilization and securing jobs. Building vehicles in Europe would also reduce exposure to EU import tariffs on these Chinese-made EVs.
Less positive in this scenario: Ghent becomes increasingly dependent on manufacturing decisions taken at Geely Group level, with Volvo no longer controlling the factory’s entire industrial future
Overall, Volvo’s figures are alarming, but that doesn’t prove its electric strategy has failed. The real story is the collapse of its traditional global premium business economics, particularly in China, combined with the costs of transitioning to electric vehicles. The company’s answer is deeper integration with Geely, regionalized products and aggressive cost reductions.
For Ghent, this could eventually be an industrial opportunity, but it also raises a question about how much of Volvo’s future will still be decided in Sweden. With what we know now, Ghent remains untouched for the moment.
