Volvo Cars plans to cut 2,500 jobs globally as declining sales in China and tougher market conditions in the United States weigh on its third-quarter earnings.
The Swedish automaker reported an operating loss of 5.6 billion Swedish kronor, equivalent to 563.7 million dollars, in the third quarter, compared with an operating profit of 6.4 billion Swedish kronor in the previous period.
The company attributed the decline to a deteriorating business environment, citing tougher market conditions in China and the United States, which it said had negatively affected free cash flow.
Volvo Cars said its revenue in China fell by almost 50 per cent year-on-year as premium vehicle brands faced what it described as “hypercompetition” from new Chinese rivals, putting severe pressure on prices.
In the United States, tariffs and reduced customer incentives for electric vehicle purchases also weighed on profit margins.
As part of its cost-cutting drive, Volvo Cars plans to save five billion Swedish kronor by eliminating 2,500 jobs worldwide, including 2,000 positions in Sweden.
Volvo Cars shares were last reported down 31 per cent.
Boluwatife Enome
Follow us on:
