Volvo Cars is hitting the brakes on spending in a big way. The Swedish automaker just unveiled a sweeping cost-cutting plan totaling 18 billion Swedish krona (€1.6 billion) after its first-quarter profits took a nosedive—down over 70% from the same period last year, excluding joint ventures and associates.
In a statement released Monday, April 29, Volvo detailed a three-pronged strategy to stabilize its finances: trimming SEK 3 billion (€274 million) in variable costs, slashing SEK 5 billion (€445 million) in indirect expenses, and unlocking SEK 10 billion (€890 million) in cash flow improvements through reduced capital expenditures and leaner working capital in 2025 and 2026.
That’s not all. Job cuts are on the table too, though the company hasn’t put a number on how many employees or consultants will be affected worldwide. “There will be redundancies across our global operations,” Volvo confirmed, promising to share more specifics soon.
The announcement follows closely on the heels of an earlier decision—made April 18—to lay off up to 800 workers at three U.S. sites over the next few months, citing persistent market volatility.
Volvo Cars CEO Håkan Samuelsson didn’t mince words about the challenges ahead. “The automotive industry is in uncharted territory,” he told MSNBC. “To weather this storm, we’ve got to ramp up our cash flow and tighten costs.” His focus? Boosting profitability, ramping up electrification efforts, and building vehicles closer to the markets they serve—particularly in the U.S. and China, even if that means scaling back in Europe.
Looking ahead, Volvo is bracing for a rocky road in 2025. The company flagged a mix of global economic uncertainty, political instability, and intensifying price competition as key hurdles to watch. Tariffs and shrinking demand are also squeezing margins, making this transition period one of the most difficult in the automaker’s recent history.
