Volvo Cars axes 3,000 jobs in cost-cutting push, investment arm could be affected

The Swedish carmaker announced the layoffs on Monday, saying they are part of an €1.57 billion action plan to cut costs and improve cash flow.

"The actions announced today have been difficult decisions, but they are important steps as we build a stronger and even more resilient Volvo Cars," said CEO Håkan Samuelsson. "The automotive industry is in the middle of a challenging period. To address this, we must improve our cash flow generation and structurally lower our costs."

Most of the job cuts will affect office-based positions in Sweden, representing around 15 percent of Volvo Cars' global office workforce. The company will also reduce 1,000 consultant positions, mostly in Sweden.

Volvo Cars, owned by China's Geely, said the restructuring is necessary to deliver on its long-term strategy of becoming a fully electric car company. The company said it expects to incur a one-time restructuring cost of up to €130m, which will affect its second-quarter financial results. The structural changes are expected to be completed by autumn 2025.

Impact investment arm potentially affected

Volvo Cars plays quite an important role in Sweden's impact ecosystem. The company is driving change not only through the electrification of its own vehicle lineup, but also via impact investments through its investment arm, Volvo Tech Fund. The corporate venture capital fund has backed a number of Swedish impact firms, including polyester recycler Syre and battery manufacturer Altris.

The redundancies could also affect the Volvo Cars Tech Fund, according to Volvo Cars communications chief Magnus Holst.

"Those working at the Volvo Cars Tech Fund could potentially be affected by this," he tells Impact Loop.

However, exactly which positions will be cut within the group remains unclear. Volvo Cars has begun negotiations with relevant trade unions and filed redundancy notices with the Swedish Employment Service on Monday.

Could the cost savings mean the Volvo Cars Tech Fund receives less money to invest?

"I cannot answer any questions about the next steps of the savings package at this stage."

Impact Loop attempted to reach Ann-Sofie Ekberg, CEO of the Volvo Cars Tech Fund, but was unsuccessful. We also contacted Shkölqim Fejzi, investment director at the Volvo Cars Tech Fund, who referred all enquiries to Volvo Cars' central press department.