STOCKHOLM: Swedish carmaker Volvo Cars said on Friday that it would cut about 2,500 jobs worldwide as US tariffs and strong competition from local brands in China pushed it into a third-quarter loss.
The company, owned by Chinese group Geely, reported revenue of 66.9 billion kronor ($6.7 billion) for the third quarter, down nearly 23 per cent from the same period last year.
It swung to a net loss of 5.7 billion kronor for the quarter, compared with a net profit of 4.5 billion kronor a year earlier.
“We continue to operate in a very tough environment with strong external challenges: de-globalisation, hypercompetition and climate change,” chief executive Hakan Samuelsson said in a statement.
In response, the company announced a new five-billion-kronor savings plan, which it said would result in about 2,000 job cuts in Sweden and another 500 globally, “through natural attrition and by targeted exit packages to employees”.
The company, which had bet heavily on electric vehicles (EVs), said the removal of consumer incentives for EVs in the United States under President Donald Trump had also hit its margins.
In 2024, Volvo Cars abandoned plans to transition to exclusively EV sales by the end of the decade.
“We are convinced that we have the right long-term strategy addressing these challenges. However, in the short term, with severely challenged volumes, we need to reinforce our turnaround plan with additional decisive actions, lowering our break-even point and improving cash flows to make us more resilient,” Samuelsson said.
Like other European carmakers, Volvo Cars is struggling amid a difficult global environment. Last year, it announced an 18-billion-kronor cost-cutting plan.
The company said in September that Samuelsson would step down when his contract ends, with Skoda Auto chief executive Klaus Zellmer set to replace him no later than October next year.