Volvo’s $1.87 billion shake-up includes job cuts, leadership changes and US factory focus

Volvo Car AB has announced a sweeping cost-cutting initiative worth 18 billion Swedish kronor (approximately $1.87 billion), as the automaker struggles with weakening global demand and mounting trade tensions.

The restructuring plan, unveiled on April 29, includes job reductions and aims to protect profits as the company adapts to ongoing challenges in the global automotive market.

The move comes as part of a broader overhaul under the leadership of Chief Executive Officer Hakan Samuelsson, who returned to head the company earlier this month. Samuelsson, 74, previously led Volvo for a decade until 2022 and was brought back by Geely Chairman Li Shufu to stabilise the company amid flagging sales and production delays.

In an interview with Bloomberg Television, Samuelsson pointed to international tariffs—especially those imposed by the United States—as a significant burden. “The tariffs are disturbing a global company massively,” he said. To respond, Volvo is refocusing its strategy to reduce expenses, ramp up US-based manufacturing, and prioritise operations in key markets such as the United States and China.

As part of this strategic shift, Volvo said it will soon unveil its first extended-range plug-in hybrid vehicle tailored for the Asian market. The company also intends to strengthen production at its South Carolina plant, allowing it to better weather the impact of US tariffs. While some of the additional costs imposed by tariffs will be passed on to customers, Volvo will absorb others to remain competitive, Samuelsson noted.

The automaker has already begun implementing leadership changes as part of the restructuring. Samuelsson has replaced the company's chief financial officer and has introduced a more rigid return-to-office policy to improve operational efficiency.

Volvo also announced that it is withdrawing its financial guidance for both 2025 and 2026, underscoring the uncertainty facing the company in the near term. Despite its global reputation, Volvo has faced significant financial strain in recent years, losing roughly two-thirds of its market value since its initial public offering in 2021. This has made it an increasingly attractive target for short sellers.

The company said most of the financial impact from its cost-cutting measures will be realized in 2026.

By Tamilla Hasanova