Volvo Cars Announces 2,500 Job Cuts And USD563M Operating Loss

Volvo Cars said Friday it plans to cut 2,500 jobs after a sharp decline in its Chinese market weighed on third-quarter earnings.

The long established Swedish auto manufacturer owned by Geely also reported an operating loss of 5.6 billion Swedish kronor (USD563.7 million) in the third quarter, down from an operating profit of 6.4 billion Swedish kronor in the previous period. 

When Geely bought Volvo in 2010 and revived it with a huge cash infusion of USD1.8B for the development of the new XC90 SUV, Volvo Cars global sales jumped and Geely got its return on investment faster than expected.

Now, Volvo Cars says a deteriorating environment led by “tougher” market conditions in China and the U.S., which “negatively affected free cash flow.”

Revenues in China fell almost 50% year-on-year as premium brands faced “hyper-competition” from new Chinese rivals, which also put severe pressure on pricing. 

“It’s really a lot about the Chinese market, of course, where the change has come faster than we thought,” CEO Håkan Samuelsson told reporters at a news conference. 

On Friday, October 23, 2026, Volvo Cars also announced 2,500 job reductions representing around 6% of its global workforce while reporting an adjusted operating loss of 3.7 billion Swedish crowns for the third quarter.

Weak demand in China, where deliveries fell more than 40% in the third quarter, and the United States hit sales while slow production ramp-up of the EX60 compounded losses.

This job losses and profit cuts together with cost-cutting moves is also happening with other European car manufacturers like Volkswagen and BMW in recent months in 2026.

Meanwhile, Volvo plans to save 5 billion kronor through fast moving measures, building on earlier restructuring with around 3,000 job cuts as the automaker reported a 5.6 billion kronor operating loss.

CEO Hakan Samuelsson stated the turnaround plan requires “decisive reinforcement,” with plans to introduce seven new vehicles for Western markets before handing leadership to Klaus Zellmer by October 1, 2027.

Volvo Cars’ share price hit a record low this week, down 54% year-to-date, after the company scrapped full-year guidance, though Samuelsson maintains the relationship with Zhejiang Geely Holding remains a “huge advantage.