Volvo Cars shares plunged on Friday after the Swedish automaker reported a third-quarter net loss of approximately $573 million and announced plans to eliminate 2,500 jobs as it steps up efforts to contain costs.
The stock fell more than 26%, hitting record lows after the results revealed the extent of pressure on the company’s business.
Shares have lost more than two-thirds of their value this year, as intensifying competition in China, US tariffs and weaker demand have clouded the outlook for the automaker, which is majority-owned by China’s Geely Holding.
Volvo swings to loss as revenue falls 22.6%
Volvo Cars reported revenue of 66.9 billion Swedish kronor for the third quarter, down 22.6% from 86.4 billion kronor a year earlier.
Operating income swung to a loss of 5.6 billion kronor, compared with a profit of 6.4 billion kronor in the same quarter last year.
Excluding joint ventures, associates and certain items, the company recorded an operating loss of 3.7 billion kronor, far worse than analysts’ expectations for a loss of 724 million kronor, according to Reuters.
Gross margin, another closely watched measure of the pressure on profitability, contracted to 14.7% from 20.4% a year earlier.
Another 2,500 jobs to go
“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.”
Hakan Samuelsson
Alongside the results, Volvo announced intentions for an additional 5 billion kronor in savings from indirect spending and variable costs.
The measures will result in approximately 2,500 job cuts worldwide, including 2,000 positions in Sweden and another 500 elsewhere.
The reductions will account for around 6% of the company’s workforce and come on top of 3,000 job cuts announced previously.
The company expects the full financial benefits of the new measures to materialize by the end of 2027.
China competition forces strategic rethink
Volvo had already withdrawn its full-year 2026 sales-volume and cash-flow guidance earlier this month, citing deteriorating market conditions in China and a slower-than-expected recovery in the US.
The automaker is now shifting its focus toward profitability rather than chasing market share in China, where local manufacturers have intensified competition through pricing and increasingly competitive products.
“It’s really a lot about the Chinese market, of course, where the change has come faster than we thought, and really now we can see that selling global cars developed in Europe and China will not work, and then this is affecting all the Western players in China,” CEO Samuelsson told CNBC on “Squawk Box Europe” on Friday.
The company is looking to strengthen its regional product strategy and make operations more efficient as it navigates the difficult environment.
Volvo’s announcement comes as traditional Western carmakers face a difficult combination of Chinese competition, trade barriers and pressure to maintain margins while investing in new technology.
The broader Swedish market was essentially flat at the time of writing, leaving Volvo’s sharp decline standing out against the wider market.
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