Volvo to cut 3,000 jobs in overhaul

Volvo Cars has announced plans to cut approximately 3,000 jobs, primarily affecting white-collar positions, as part of a restructuring initiative aimed at reducing costs and improving operational efficiency. This decision comes in response to weak demand for electric vehicles (EVs), rising operational expenses, and global trade uncertainties, including potential U.S. tariffs on imports from Europe and China. The job reductions represent about 15% of the company's office-based workforce and will impact various departments, including research and development, communications, and human resources, with a significant concentration in Gothenburg, Sweden.

CEO Håkan Samuelsson, who was reinstated in April to lead the turnaround, emphasized the necessity of these measures to enhance cash flow and adapt to the challenging automotive landscape. The restructuring is expected to incur a one-time cost of 1.5 billion Swedish crowns ($140 million). Volvo has also withdrawn its financial guidance for the year, citing unpredictable markets and weak consumer confidence as contributing factors.

The company is heavily exposed to new U.S. import duties, which could make it difficult to export its more affordable models to the U.S. market. Shares in Volvo have lost around 24% of their value this year amid growing concerns about its financial prospects, although they saw a 3.6% increase on the day of the announcement.

Volvo aims to finalize the restructuring plan by the fall, focusing on streamlining operations while reinforcing its commitment to electrification and sustainability. Analysts view this restructuring as a necessary step to address the company's financial challenges and position it for future growth.