Volvo Cars plans to cut around 2,500 jobs worldwide as it faces mounting losses, falling revenue and tough competition in China. The company aims to save SEK 5 billion annually to improve profitability.

Around 2,000 jobs are expected to be cut in Sweden, mainly in the Gothenburg area, with the remaining 500 reductions planned elsewhere. The cuts will involve voluntary redundancies, fewer new hires and the cancellation of consultant contracts, with most reductions affecting office workers rather than factory staff.

The announcement follows a difficult third quarter for the carmaker, which reported an operating loss of SEK 5.6 billion, compared with a profit of SEK 6.4 billion a year earlier. Revenue fell nearly 23 percent to SEK 66.9 billion, sending its shares sharply lower on Friday.

Volvo Cars has also faced pressure from changes to electric vehicle incentives in the United States.