- Adjusted operating loss SEK 3.7 billion vs year-ago 5.8 billion crown profit
- Targets additional 5 billion crowns of indirect spend and variable cost cuts by end next year
- Will cut about 2,000 jobs in Sweden, another 500 globally
STOCKHOLM, Oct 23 (Reuters) - Volvo Cars said on Friday it would cut a further 2,500 jobs, mostly in Sweden, after plunging to a much bigger-than-expected third-quarter operating loss, sending its shares down almost 30%.
Majority-owned by China's Geely Holding (GEELY.UL), Volvo has struggled with uneven demand for electric vehicles, mounting tariff pressures and deteriorating market conditions in China.
The automaker reported an operating loss of 3.7 billion Swedish crowns ($373 million) in the quarter, compared with a profit of 5.8 billion crowns a year earlier. Citi analysts said the consensus forecast was for a loss of 724 million crowns.
"The third quarter of 2026 was very disappointing and reflects a year that has become far more challenging than originally anticipated. Our ongoing turnaround plan therefore needs a decisive reinforcement," CEO Hakan Samuelsson said.
Volvo said that, in addition to previously announced 23 billion crown cost-cuts, it would reduce indirect spending and variable costs by a further 5 billion crowns, with the savings expected to be realised by the end of next year.
The latest measures will affect about 6% of Volvo's workforce, including around 2,000 jobs in Sweden, through the termination of consultant contracts, natural attrition and targeted exit packages. The cuts come on top of 3,000 job reductions announced earlier.
Samuelsson told Reuters the latest cuts should be completed by mid-2027, although he did not rule out further measures if the turnaround plan falls short.
Volvo, which earlier this month scrapped its guidance for full-year sales volume and cash flow, said it would prioritise margins over market share in China rather than engage in aggressive price competition with domestic rivals. It plans to take a similar approach in the US.
Volvo's gross margin fell to 14.7% in the third quarter from 20.4% a year earlier.
The shares hit a record low this week and are down more than two-thirds so far this year.
($1 = 9.9180 Swedish crowns)
Reporting by Marie Mannes. Editing by Terje Solsvik, Adam Jourdan and Mark Potter
Source: Reuters