Sweden-based vehicle manufacturer Volvo Cars has revealed plans to lay off approximately 3,000 employees as part of new cost-reduction strategies. The majority of the job cuts will affect office personnel in Sweden, accounting for around 15% of the company’s white-collar workforce. This announcement comes just weeks after Volvo Cars, a subsidiary of China's Geely Holding, unveiled an 18 billion Swedish kronor ($1.9 billion; £1.4 billion) "action plan" to reorganize its operations.
The global automotive sector is currently grappling with significant obstacles, such as elevated costs due to US President Donald Trump's 25% tariffs on imported vehicles, alongside rising material expenses and declining sales in Europe. Håkan Samuelsson, CEO of Volvo Cars, acknowledged the "challenging period" facing the automotive industry as a key factor driving the layoffs. "The actions announced today have been difficult decisions," he stated, "but they are vital steps as we strive to create a stronger and more resilient Volvo Cars."
Earlier this month, the company reported an 11% decrease in global sales for April when compared to the same month last year. Volvo's corporate headquarters and development offices are located in Gothenburg, Sweden, with significant production facilities in Sweden, Belgium, China, and the United States. In a notable historical context, Volvo was sold by American automotive giant Ford to China's Geely in 2010.
The company initially pledged to transition all of its vehicles to electric by 2030. However, this ambition was recently moderated due to several complications, including "additional uncertainties created by recent tariffs on EVs in various markets."
In parallel, Japanese automaker Nissan announced a global reduction of 11,000 jobs and the closure of seven factories, necessitated by declining sales and operational challenges in its primary markets. Over the past year, Nissan's total layoffs have reached 20,000, representing about 15% of its workforce.
In a reflection of the fierce competition within the automotive industry, Chinese electric vehicle manufacturer BYD declared its intention to reduce prices on more than 20 of its models. The price for its most affordable car, the Seagull EV, is now as low as 55,800 yuan ($7,745; £5,700). This prompted similar pricing strategies from state-owned Changan and Leapmotor, which is affiliated with Chrysler's parent company, Stellantis. Following these announcements, shares in Chinese automotive manufacturers experienced a notable decline.
April also marked a significant milestone for BYD, as it successfully outsold Tesla in Europe for the first time, according to research from car industry analytics firm Jato Dynamics.
