Volvo Cars on 26 May announced that it will be laying off approximately 3,000 employees worldwide, including 1,200 permanent staff in Sweden, as part of its cost-cutting and restructuring plan worth SEK 18 billion (approximately USD 1.65 billion).
In a company statement, Volvo said the automotive industry is currently facing significant challenges, and this move is necessary to ensure the company can continue growing in the long run.
The company remains committed to its goal of becoming a fully electric carmaker, as that is the fastest-growing segment in the market.
Most of the affected employees are office-based, primarily in Sweden. In addition to permanent staff, about 1,000 contract workers or consultants will also be let go, with the rest of the layoffs happening in other global markets.
The company has begun negotiations with labor unions and will be submitting an official layoff notice to Sweden’s labor authority. Meanwhile, Volvo is still reviewing its organisational structure, so the exact number of layoffs across all regions has yet to be finalised.
Volvo CEO Håkan Samuelsson said this was a difficult but necessary decision to make the company stronger and more resilient. He added that the automotive industry is going through a tough period, so Volvo must cut costs and improve its cash flow.
As a result of this announcement, Volvo expects to incur a one-time restructuring cost of SEK 1.5 billion, which will affect the company’s financial performance in Q2 2025. The impact will be felt starting from Q4 2025 and into 2026. More details will be revealed in the financial report on July 17.
Shahriena Shukri is a journalist covering business and economic news in Malaysia, providing insights on market trends, corporate developments, and financial policies. More about Shahriena Shukri.
