10:49 am, October 26, 2026
Volvo Cars is to cut around 2,500 jobs worldwide after reporting a quarterly operating loss of SEK 3.7bn (£290m), with fierce competition in China hitting the manufacturer’s finances.
The Swedish carmaker has announced a fresh cost-cutting programme after what it described as a further deterioration in trading conditions during the third quarter of 2026.
Its adjusted operating loss, excluding joint ventures, associates and exceptional items, came in at SEK 3.7bn, representing a negative margin of 5.6%.
The performance was particularly poor in China, where Volvo’s revenues almost halved compared with the same period last year.
Bosses blamed intense competition from domestic Chinese manufacturers and heavy pressure on pricing, which has made life increasingly difficult for established premium brands.
The situation was also challenging in the US, where tariffs and the removal of incentives for electrified vehicles weighed on margins.
Volvo has now announced plans to cut a further SEK 5bn (£390m) from its costs, on top of savings already made through previous restructuring programmes.
The latest measures will result in approximately 2,500 job losses globally, including around 2,000 in Sweden.
The reductions will be achieved through ending consultancy contracts, natural staff turnover and targeted exit packages, the manufacturer said.
President and CEO Hakan Samuelsson said the company needed to take further action to protect its finances.
‘We continue to operate in a very tough environment with strong external challenges: de-globalisation, hypercompetition and climate change,’ he said.
‘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.’
The company’s quarterly results were also hit by a SEK 1.1bn negative revaluation of US emissions credits following legislative changes, alongside SEK 900m relating to its share of Polestar’s losses in the second quarter.
Despite the financial difficulties, Volvo is pressing ahead with plans to launch 13 new cars between now and the end of 2030.
Three will be unveiled next year, including one aimed at Europe and two developed specifically for China.
Volvo is also banking on the success of its EX60 electric SUV, which has attracted more than 50,000 orders across Europe.
However, the manufacturer admitted production has taken longer to ramp up than expected because of new manufacturing technology, including its cell-to-body battery construction.