Mikael Sjoberg | Bloomberg | Getty Images
Swedish-based automaker Volvo Cars on Tuesday announced cost-cutting plans of 18 billion Swedish krona ($1.87 billion) as its operating profit fell sharply in the first three months of the year.
Volvo Cars, which is owned by China’s Geely Holding, reported first-quarter operating profit of 1.9 billion krona, down from 4.7 billion krona in the same period last year.
The company said the results reflect a drop in wholesales as part of a planned inventory reduction during the final three months of 2024, adverse currency effects and broader automotive industry turbulence.
Volvo Cars said its so-called “cost and cash action plan” would include reductions in investments and redundancies at its operations across the globe. The company did not provide further information on the potential scale of the layoffs but said it would update with “more details as soon as possible.”
Volvo Cars said it is no longer providing financial guidance for both 2025 and 2026.
U.S. President Donald Trump imposed 25% tariffs on cars imported to the U.S. earlier this month. The White House has said it also plans to place tariffs on some auto parts such as engines and transmissions, which are set to take effect no later than May 3.
“The automotive industry is in the middle of a very difficult period with challenges not seen before,” Håkan Samuelsson, Volvo Cars CEO, said in a statement.
“While we still have a lot to do, our direction going forward is focused on three areas: profitability, electrification and regionalization,” he added.
This breaking news story is being updated.
