$3bn, 3000 jobs: car giant’s huge cuts

Car giant Volvo is embarking on a radical cost-cutting exercise amid increased economic uncertainty in the motoring market.

Car giant Volvo is trimming its workforce by 15 per cent in radical cost-cutting exercise amid increased uncertainty in the motoring market.

The Swedish firm has announced it will cut 3,000 jobs in a bid to slice US$1.9 billion ($2.93bn) from its budget, as part of a “cost and action plan”.

Volvo, who is owned by Chinese group Geely, said white-collar jobs were in the firing line, including 1200 positions in Sweden and 1,000 roles filled by consultants mostly in Sweden.

“The actions announced today have been difficult decisions, but they are important steps as we build a stronger and even more resilient Volvo Cars,” said Håkan Samuelsson, Volvo Cars President and CEO.

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Volvo is making some big cuts. Photo: Supplied

“The automotive industry is in the middle of a challenging period.

“To address this, we must improve our cash flow generation and structurally lower our costs. “At the same time, we will continue to ensure the development of the talent we need for our ambitious future.”

Volvo said move “aims to build a stronger and even more resilient Volvo Cars at a time when the automotive industry is facing considerable challenges in its external environment”.

Those challenges include ferocious competition from the increasing number of Chinese carmakers entering the global vehicle market, continued cost of living pressures for prospective car buyers and US President Donald Trump’s tariffs.

The move sees Volvo double down on its transition to a fully electric car company.

“These structural changes are necessary for Volvo Cars to deliver on its long-term strategy, strengthening its foundations for profitable growth,” the company said.

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Hakan Samuelsson – President & CEO, Volvo Car Group

“Volvo Cars remains firm on its ambition of becoming a fully electric car company, as fully electric is the fastest growing market segment and Volvo Cars is a leader in this transition.”

Volvo is not alone as it seeks to adapt to the shifting goalposts in a challenging global economic environment.

Earlier this month, Toyota revealed that the company expected tariffs to cost it $US1.3 billion in just two months, as Ford said it expected a $1.5bn dent and General Motors slashed its annual profit forecast by US$5bn.

Meanwhile, orders for Tesla’s hero vehicle the Cybertruck have hit a wall in the US and

Honda, Nissan and Mitsubishi have continued to deal with fall out from failed merger talks as they attempt to reposition their offerings to consumers.

For its part Volvo said it recorded a record breaking core operating profit of US$2.84bn

for the full year 2024, with revenue at an all-time high of $US42.7bn and global sales hitting a record 763,389 sales.

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Volvo is doubling down on its transition to a fully electric car company. Photo: Supplied

Volvo’s share price reacted cautiously positive to the news. After hitting a record share price early this month, it’s value dipped in recent weeks but since recovered on the cost-cutting news.

Originally published as $3bn, 3000 jobs: car giant’s huge cuts