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Volvo announced that it plans to cut 3,000 positions as President Trump’s tariffs continue to make up in the automotive market.
The Swedish-based auto company said in a press release on Monday the move is part of its “cost and cash action plan” that aims to build a stronger company as the industry faces “a huge challenge in its external environment.”
The release notes that layoffs will primarily affect Sweden’s office-based positions, accounting for 15% of its global office-based workforce.
“These structural changes are necessary for Volvo Cars to adopt its long-term strategy and strengthen its foundation for profit growth,” Release noted.
The company said that after completing a review of the entire organization and determining a new structural setting, a specific number of jobs will be determined. About 1,200 layoffs will hold employee positions in Sweden, while 1,000 will be held by consultants, mainly Sweden.
The rest will happen in other markets.
“The actions announced today were a difficult decision, but it was an important step for us to build a stronger and more resilient Volvo Cars,” said Håkan Samuelsson, president and CEO of Volvo Cars, in a press release. “The automotive industry is in a challenging time. To address this, we must improve cash flows and structurally lower our costs.”
Trump announced earlier this month that he would expand his planned 25% tariff on imported cars and auto parts. The execution order Trump signed spare auto parts, both facing these tariffs and the tariffs Trump has already imposed on foreign metals.
Instead, parts face higher rates of available per product.
The government also allows automakers to apply for a 15% price shift in the first year of tariffs and a 10% offset in the second year to allow the company to increase the company’s domestic output. The reduction will be phased out in the third year.
United Auto Workers announced support for Trump’s automatic tariffs to protect workers and the U.S. industry, but the tariffs have increased financial difficulties faced by auto companies, which are already facing high costs.