Volvo Cars to cut 2,500 jobs globally
What's the story
Volvo Cars, the Swedish carmaker owned by Chinese group Geely, has announced plans to cut around 2,500 jobs globally. The decision comes after the company posted a loss in the third quarter of this year due to US tariffs and fierce competition from domestic brands in China. The company's revenue for Q3 stood at 66.9 billion kronor ($6.7 billion), nearly a 23% decline compared to last year's figures.
Financial downturn
Volvo Cars swings to loss in Q3
Volvo Cars has reported a net loss of 5.7 billion kronor for the third quarter, a stark contrast to last year's profit of 4.5 billion kronor.
The company's CEO Hakan Samuelsson acknowledged the tough environment and strong external challenges such as de-globalization, hypercompetition, and climate change.
He said these factors have been instrumental in the company's current financial situation.
Strategic response
New savings plan to result in job cuts
In light of the financial downturn, Volvo Cars has unveiled a plan to save 5 billion kronor.
The company says this strategy will result in around 2,000 job cuts in Sweden and another 500 globally.
These layoffs will be done through natural attrition and targeted exit packages to employees.
The company had previously announced an 18-billion-kronor cost-cutting plan last year due to tough market conditions.
Strategy shift
Reconsidering all-electric car strategy
Volvo Cars, which had heavily invested in electric vehicles (EVs), is now reconsidering its all-electric car strategy.
The move comes after the removal of consumer incentives for EVs in the US under President Donald Trump.
Samuelsson said, "We are convinced that we have the right long-term strategy for addressing these challenges. However, in the short term, with severely challenged volumes, we need to reinforce our turnaround plan with additional decisive actions."