Volvo Shares Plunge 24 Percent in a Day as Carmaker Announces 2,500 More Job Cuts

Swedish carmaker Volvo Cars has run into a cash crisis. On the day it reported a far bigger than expected third-quarter loss and a doubling of its cash burn, the company’s shares fell 24 percent in a single day, dropping to a record low.

At the same time, the company announced a further 2,500 job cuts worldwide as part of its cost-cutting plan. About 2,000 of those jobs will go in Sweden, with roughly 500 more in other countries.

The third-quarter results, published on Friday (23 October), showed an adjusted operating loss of 3.7 billion Swedish krona for July to September 2026, equivalent to about 373 million dollars.

A year earlier, in the same period, the company had made a profit of 5.8 billion krona. Analysts had not forecast a loss anywhere near this size either, which made the market reaction even sharper.

Alongside the loss, the pressure of cash spending has also grown. Cash burn in the quarter reached 8.9 billion krona, double the figure for the same quarter a year earlier.

Chief executive Hakan Samuelsson described the third quarter as extremely disappointing. In his words, the result reflected a year that had turned out far harder than initially expected, and stronger measures were therefore needed under the ongoing turnaround plan.

Volvo aims to complete the job cuts by the middle of 2027. The chief executive did not, however, rule out further steps in the future.

The company said the new cuts would be carried out by cancelling consultant contracts, through natural attrition and by offering voluntary departures to specific employees. About 6 percent of the total workforce will be affected. The company had previously already announced 3,000 other job cuts.

Alongside the layoffs, Volvo has also set a target of saving an additional 5 billion krona from indirect and variable costs by the end of next year.

Volvo, majority-owned by China’s Geely, has been hit by uncertain demand for electric cars, tariff pressure and a difficult market in China. Other European carmakers are also under pressure from weak demand, intense competition from Chinese rivals and excess factory capacity; major rival Volkswagen is planning up to 100,000 job cuts and is considering closing several plants.

Samuelsson came out of retirement in 2025 to return as chief executive and tackle the crisis. Cost cutting, regionally based operations and closer technological cooperation with Geely were launched, but there has been no significant improvement. The company’s gross margin has also fallen in a year from 20.4 percent to 14.7 percent.

The new electric SUV, the EX60, was supposed to play a major role in the turnaround plan. But production of the vehicle has been delayed by battery assembly problems. Although 40,000 cars were planned for this year, only about 5,000 units have been built so far.

Earlier this month Volvo also withdrew its full-year forecasts for sales volumes and cash flow. Because it decided to protect margins rather than join a price war with rivals in China, its revenue there fell by about 50 percent in the third quarter.

Samuelsson admitted that production and business operations in China should have been adapted to the local market earlier. In the same way, he said, the need to expand local production in the United States to counter the impact of tariffs should also have been recognised sooner.

Next year Samuelsson will be succeeded by former Skoda chief Klaus Zellmer. According to analysts, the task of pulling Volvo out of its crisis has become even harder for him. The company plans to launch 13 new cars by the end of the decade, six of them built for the Chinese market.