The Swedish workforce at Volvo Cars will undergo 3,000 white-collar job eliminations as part of Geely Holding Group’s cost-cutting strategy to combat industry headwinds from trade tensions and rising input costs and weakening European market demand.
The job reductions amount to 15% of Volvo’s salaried staff in Sweden after the company presented an 18 billion Swedish kronor ($1.9 billion) restructuring plan. According to CEO Håkan Samuelsson the auto industry faces a difficult time due to worldwide market instability combined with increased price battles.
The company made these tough decisions because they are essential to develop a resilient and stronger Volvo Cars organization according to Samuelsson in his Tuesday statement.
During April 2023 Volvo recorded an 11% decrease in worldwide sales compared to April 2022. The company upholds its commitment to long-term electric vehicle transition yet delayed its original 2030 electric-only goal due to new tariffs and delayed EV market adoption rates.
The global car industry faces escalating challenges from both emerging geopolitical factors and rising low-cost electric vehicle production methods. The import tariffs imposed by U.S. President Donald Trump on foreign-made cars have made it more challenging for European brands to implement export strategies.
The current layoffs form part of a wider industry-wide restructuring movement in the global automotive sector. Nissan followed Honda and Mitsubishi in failed merger discussions while announcing the elimination of 11,000 positions together with factory closures during the recent year. Nissan eliminated 20,000 jobs from its workforce during the previous 12 months.
Chinese EV companies continue to raise the stakes in their price competition. BYD has reduced prices across more than 20 vehicle models including its entry-level Seagull EV which now begins at $7,745. The auto shares in China experienced market volatility because Stellantis-backed Changan and Leapmotor implemented their own price reductions.
The European market shows Tesla losing market share. The U.S. EV leader Tesla experienced a 50% decrease in April sales according to Jato Dynamics as Chinese competitors BYD started selling more vehicles than Tesla for the first time.
Volvo and other automakers must rapidly adjust to a market environment that becomes more volatile because of escalating competition and supply chain disruptions caused by tariffs.
