Volvo Imposes Job Cuts of 3,000 to Cope with Tariff Impact
Volvo Cars, one of Chinese automaker Geely's owned brands, has announced a significant restructuring plan that includes job cuts and production adjustments in response to the financial burden caused by U.S. import tariffs on automobiles.
The job cuts will primarily affect office-based positions in Sweden, representing about 15% of Volvo Cars' white-collar workforce. This equates to approximately 3,000 jobs being cut globally, including about 60 jobs at its U.S. headquarters in New Jersey.
The decision to reduce the workforce is part of an "action plan" announced last month, aimed at saving 18 billion Swedish kronor ($1.9 billion). The job cuts are a direct result of the 25% U.S. import tariffs on automobiles, implemented by President Donald Trump.
Volvo Cars' CEO, Håkan Samuelsson, attributes the job cuts to the "challenging period" caused by U.S. tariffs. In a company statement, Samuelsson expresses that the decisions regarding layoffs were difficult but necessary for the long-term sustainability of the company.
Financially, Volvo recorded a 11% decrease in global sales in April compared to the same period last year. The company also reported a non-cash impairment charge of approximately $1.2 billion due to U.S. tariffs and production delays affecting its latest electric vehicles, notably the ES90 sedan and EX90 SUV. These factors contributed to an operating loss of $1 billion in the second quarter of 2025, down from an $800 million profit a year earlier.
To counteract tariff pressures, Volvo plans to increase production at its South Carolina plant, including beginning U.S. assembly of the XC60 SUV by late 2026. This shift aims to reduce dependency on imports subject to tariffs and improve profitability. The company is also working to become leaner with a structurally lower cost base to better position for sustained profitability in the Americas and globally.
Samuelsson states that the job cuts are "important steps" towards a stronger and more resilient Volvo Cars. The company's strategic goal is to maintain profitability amid tariff-related challenges by optimizing its workforce and manufacturing operations.
The exact timeline for the job cuts has not been disclosed, but the BBC reported this news. The impact of U.S. import tariffs on automobiles has led Volvo Cars to implement substantial job cuts and incur significant financial costs to offset these burdens. This coordinated response by Volvo highlights how high import tariffs directly disrupt automaker employment and financial strategies, prompting a pivot toward local manufacturing and workforce optimization.
The job cuts, predominantly targeting office-based positions in Sweden, are a direct result of the 25% U.S. import tariffs on automobiles, leading to a financially challenging period for Volvo Cars. In an effort to maintain profitability, Volvo has announced plans to increase production at its South Carolina plant, including U.S. assembly of the XC60 SUV, while also working to become leaner and structurally lower its cost base.
