Gothenburg:Volvo Cars has announced plans to reduce its global workforce by approximately 2,500 positions following a reported loss in the third quarter, driven by deteriorating market conditions in China and the United States.

According to Anadolu Agency – English, the job cuts will primarily affect operations in Sweden, accounting for around 2,000 of the positions. The reductions will be implemented through the termination of consultant contracts, natural attrition, and targeted exit packages. The company aims to achieve savings of an additional 5 billion Swedish kronor (approximately $504 million), with the financial benefits expected to materialize by the end of 2027.

The recent financial report from Volvo Cars revealed an adjusted operating loss of $373 million, contrasting with a $585 million profit recorded in the same period a year earlier. Revenue has dropped to $6.74 billion from $8.71 billion. The company's performance in China was notably impacted, with revenue nearly halving due to intense competition and pricing pressures. In the United States, profit margins were affected by tariffs and the removal of incentives for electrified vehicles.

Volvo Cars experienced an increase in sales of fully electric vehicles, which now represent 32% of total sales, up from 22%. When including plug-in hybrids, the total share of electrified vehicles reached 53%. Looking forward, Volvo is planning to introduce 13 new models by the end of 2030, including two models specifically designed for the Chinese market, set to be unveiled in 2027 through enhanced collaboration with Geely. Additionally, the company plans to begin production of the XC60 in Charleston in early 2027.

Earlier in the month, Volvo Cars withdrew its full-year sales volume and cash flow forecast, citing weaker-than-expected sales and challenging market conditions. Despite the current uncertainties, the company has refrained from providing updated short-term guidance but remains committed to its long-term goals of achieving strong positive cash flow and an 8% operating margin. Following the announcement of the financial results, Volvo Cars' share price experienced a decline of approximately 29%.