Volvo Plans to Reduce Its Employee Base by 15% Due to Lackluster Electric Vehicle Sales
Volvo Announces Job Cuts as Part of £1.4bn Cost-Saving Plan
In response to the slowdown in electric vehicle (EV) sales and other external factors, Volvo has announced it will reduce its office workforce by 15%. The majority of the job cuts will affect white-collar workers in Sweden.
Volvo's CEO, Hakan Samuelsson, described the decision as “difficult but necessary” to build a stronger and more resilient company. The cost-saving measures aim to offset headwinds caused by the decline in EV sales, high costs, and global trade uncertainty.
The job cuts are part of a broader £1.4bn cost-saving strategy unveiled earlier this month. The plan includes improving cash flow and reducing structural costs, while continuing to invest in talent for future growth.
Volvo, owned by China's Geely Holding Group, produces cars in both China and Europe. The company confirmed a 16% drop in EV sales in April compared to the same period last year, with sales of its electrified models – fully electric and plug-in hybrids – falling by 11%.
American tariffs have also impacted Volvo's sales, as the company has dropped the S90 model from the US market due to 25% tariffs on imported cars. The new tariffs have made it difficult for Volvo to sell some of its vehicles in the US, and the company is considering building a second fully electric model, such as the XC60 or XC90, at the same site to address this challenge.
The job cuts will affect white-collar workers in various departments, including R&D, communication, and human resources. Samuelsson said this would streamline the company's operations and make room for employees to take on bigger responsibilities.
In early March, Samuelsson was reappointed as CEO after the end of Scotsman Jim Rowan's three-year tenure, following a period of struggles with EV sales.
It remains to be seen how many UK jobs could be impacted by the job cuts, as Volvo UK declined to comment.
The decline in EV sales and trade uncertainties have put pressure on many automakers in the industry, forcing them to reevaluate their strategies and make tough decisions.
Source: Reuters
[1] Volvo confirms 16% drop in electric car sales in April 2025: https://www.reuters.com/business/autos-transportation/volvo-confirms-16-drop-electric-car-sales-april-2025-2025-05-18/
[2] Volvo to cut 3,000 jobs as it battles against the slowdown of electric vehicle sales: https://www.reuters.com/business/autos-transportation/volvo-to-cut-3000-jobs-as-it-battles-against-the-slowdown-of-electric-vehicle-sales-2025-05-17/
[3] Volvo's annual electric car sales plummet 11% in April: https://www.autocar.co.uk/car-news/new-cars/volvos-annual-electric-car-sales-plummet-11-april
- In an effort to adapt to the changing automotive industry and finance, Volvo is also considering investing in technology, potentially building a second electric model in the US to mitigate the impact of tariffs.
- The cost-saving plan unveiled by Volvo, encompassing job cuts and an investment in talent, is a broad strategy that spans various departments in the business, including R&D, communication, and human resources, signifying a shift in the insurance and finance sectors.
