Volvo is axing 3,000 jobs globally under a major cost-cutting and cash action plan.

Redundancies will primarily affect office-based positions in Sweden, cutting Volvo’s white-collar workforce by around 15% globally.

The specific number of job reductions across all regions will be determined after a review of its entire organisation and following the formation of a new structural set-up, intended to complete during the autumn of 2025.

The layoffs form part of last month’s SEK 18bn (€1.7bn / £1.4bn) action plan intended to create “a stronger and even more resilient Volvo Cars at a time when the automotive industry is facing considerable challenges in its external environment”.

The Swedish brand, owned by China’s Geely, is grappling slower EV sales in Europe along with rising competition from Chinese car brands and the impact of US President Donald Trump’s auto tariffs on imports. Earlier this month, the carmaker reported global sales of 58,881 cars in April, down 11% compared to the same period last year.

Volvo’s global redundancies will include around 1,000 positions currently filled by consultants – most in Sweden – and 1,200 employees in Sweden, with the remainder in other global markets.

Håkan Samuelsson, Volvo Cars president and CEO, said: “The actions announced today have been difficult decisions, but they are important steps as we build a stronger and even more resilient Volvo Cars. The automotive industry is in the middle of a challenging period. To address this, we must improve our cashflow generation and structurally lower our costs. At the same time, we will continue to ensure the development of the talent we need for our ambitious future.”

Volvo stressed that it “remains firm on its ambition of becoming a fully electric car company, as fully electric is the fastest-growing market segment and Volvo Cars is a leader in this transition”.

The brand previously said it would go fully electric only by 2030 but rowed back on its plans in late 2024, citing changing market conditions and customer demands, along with slower-than-expected rollout of charging infrastructure, withdrawal of government incentives in some markets and additional uncertainties created by tariffs on EVs in various markets.

Rather than going pure electric by the end of the decade, the Swedish carmaker has now said it’s aiming for 90 to 100% of its global sales volume by 2030 to consist of electrified cars – this includes fully electric and plug-in hybrid models. The remaining 0-10% will allow for a limited number of mild hybrid models to be sold, if needed.

Competition continues to hot up in the EV sector, with Chinese giant BYD – which has overtaken Tesla as the European leader for sales of fully electric cars – now announcing steep discounts of up to 30% for some models in its home market, sparking fears of a ‘rat race’ price war.