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(Sharecast News) - Shares of Volvo Cars tanked on Friday after the Swedish car maker announced more job cuts and said it swung to a loss in the third quarter amid ongoing weakness in China.
The company - owned by China's Geely - posted a third-quarter loss of SEK3.7bn, versus a profit of SEK5.8bn in the same period a year earlier. Revenue in the quarter fell to SEK66.9bn from SEK86.4bn.
Volvo Cars said the results reflect "a further deteriorating external environment, led by market developments in China and the US".
"Volvo Cars remains a leader in the premium fully electric (BEV) segment, underpinned by a resilient performance in Europe where it had a BEV sales share of 45% in Q3," it said. "But the situation in China and the US was considerably tougher, which also negatively affected free cash flow."
Revenues in China fell by nearly 50% as Volvo Cars and other legacy premium brands faced hypercompetition from new Chinese alternatives, as well as severe pricing pressure. In the US, Volvo Cars continued to be dented by tariffs and the removal of consumer incentives for electrified cars, which pressured margins.
Volvo said it was now aiming to cut costs by an additional SEK5bn, a move that will lead to the loss of around 2,500 jobs globally, 2,000 of which are based in Sweden. This will be achieved by ending consultant contracts, through natural attrition and by targeted exit packages to employees.
The latest job cuts come on top of the 3,000 losses announced in May 2025.
Chief executive Hakan Samuelsson said: "We continue to operate in a very tough environment with strong external challenges: de-globalisation, hypercompetition and climate change. We are convinced that we have the right long-term strategy addressing these challenges.
"However, in the short term, with severely challenged volumes, we need to reinforce our turnaround plan with additional decisive actions, lowering our break-even point and improving cash flows to make us more resilient."
At 1410 BST, the shares were 26% lower at SEK10.47.