Austerity measures in Sweden: Volvo announces massive job cuts

Employees at the Swedish automaker Volvo Cars are facing difficult times. The manufacturer has announced plans to eliminate approximately 3,000 administrative positions worldwide. Of these, approximately 1,200 will be directly allocated to Volvo employees in Sweden, and approximately 1,000 external consulting contracts – primarily in Sweden – will be terminated. Overall, approximately 15 percent of the workforce will lose their jobs. Volvo Cars employs approximately 42,600 full-time employees worldwide (as of the end of 2024).

According to Volvo CEO Hakan Samuelsson, the automotive industry is going through a difficult phase. This is characterized by high costs, declining demand for electric cars, and geopolitical uncertainty. Therefore, Volvo now wants to structurally reduce costs to maintain competitiveness. The job cuts are expected to be implemented in the coming months.

The focus is on the headquarters in Gothenburg and other locations in Sweden, but international administrative offices are also affected. The decision was made by the Volvo Cars Board of Management, led by CEO Hakan Samuelsson, who reassumed his leadership position at the beginning of April 2025.

The savings are intended to be part of a comprehensive cost-cutting program with which Volvo aims to save around 18 billion Swedish kronor (approximately 1.7 billion euros) by 2025. Special costs of approximately 1.5 billion kronor (approximately 140 million euros) are planned for the second quarter.

Volvo was an early adopter of fully electric vehicles, but demand remains below expectations. In the first quarter of 2025, the share of pure electric cars in sales was only 19 percent, a decline of two percentage points compared to the previous year. Therefore, Volvo plans to focus more heavily on plug-in hybrids in the future to offer a bridge for customers who are still hesitant about switching completely to electric.