Chinese-owned Volvo Cars to cut 3,000 jobs

Volvo Cars, headquartered in Sweden, is set to let go of approximately 3,000 employees as part of a broader strategy to streamline operations.

These job cuts will largely affect administrative roles within Sweden and account for around 15% of the company’s office-based staff.

Just a few weeks ago, the automaker, under the ownership of China’s Geely Holding, introduced a comprehensive “action plan” worth 18 billion Swedish kronor ($1.9bn; £1.4bn) aimed at reshaping its structure.

Automobile companies globally are grappling with numerous setbacks, from the imposition of 25% import taxes on vehicles by the US government to a surge in material expenses and reduced demand across Europe.

Chief Executive Håkan Samuelsson described this as a “challenging period” for the industry, noting the necessity of such measures.

“The actions announced today have been difficult decisions, but they are important steps as we build a stronger and even more resilient Volvo Cars,” he said in a statement.

Earlier in the month, the company reported an 11% decline in April’s global sales when compared to the same month a year ago.

Volvo’s central administrative offices are located in Gothenburg, and the firm operates major factories in countries such as Sweden, Belgium, China, and the United States.

Geely acquired the automaker from its previous American owner in 2010.

In 2021, Volvo shared its vision to produce only electric vehicles by 2030. However, that plan was scaled back last year due to several complications, including “additional uncertainties created by recent tariffs on EVs in various markets.”

Meanwhile, a Japanese automotive company disclosed earlier this month its decision to reduce its global workforce by 11,000 and close seven plants, citing weak sales performance.

The manufacturer has seen significant losses due to declining sales figures in China and aggressive pricing strategies in the US, its top two markets. A proposed business alliance with two other major Japanese automakers was also abandoned earlier this year.

These new layoffs bring the company’s total job cuts in the past year to about 20,000 employees, representing 15% of its entire workforce.

In a sign of escalating competition, a leading Chinese EV brand announced sweeping price reductions across more than 20 vehicle models over the weekend.

One of its most affordable models, the Seagull EV, now starts at 55,800 yuan ($7,745; £5,700).

Following this, other Chinese auto firms, including one partly supported by a major European-American vehicle group, introduced similar discounts.

The news prompted a steep decline in share values for several Chinese automakers.

This past April, that same Chinese EV manufacturer reportedly sold more units in Europe than Tesla for the first time, according to independent car market analysts.