Volvo Cars announced on Friday that it will reduce its workforce by 2,500 positions as it grapples with a severe downturn in its Chinese market, which has severely impacted its financial performance.
In the third quarter, the company reported an operating loss of 5.6 billion Swedish Kronor ($563.7 million), a stark contrast to the operating profit of 6.4 billion Swedish Kronor recorded in the same period last year. The automaker attributed this downturn to increasingly challenging market conditions in both China and the U.S., which have adversely affected its free cash flow.
Following this announcement, Volvo Cars' shares plummeted over 28% after the European market opened, reflecting investor concerns about the company's future performance amid these difficulties