While the automotive industry has certainly seen its share of ups and downs over the years, 2025 is proving to be a banner year for it in terms of stressors.
That’s in part due to tariffs, which President Donald Trump announced earlier this year. Since April, all imported vehicles have been subject to a 25% tariff, which has put a major crimp in the operations of some of the world’s biggest car manufacturers.
A tariff on imported auto parts followed in May, making the situation even more complex.
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Different makers have coped with the tariffs in different ways. Toyota announced price increases on some of its models, and Nissan was forced to suspend production on some of its vehicles.
Some made even more drastic moves, such as General Motors, which announced it would invest $4 billion to move its Mexico production to three plants in the U.S.
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Other companies have reported falling sales, such as Mercedes Benz, which reported on Monday that unit sales of cars and vans fell 9% in Q2, primarily due to tariffs.
It’s a lot to navigate — and now, one of the oldest carmakers is making hard decisions to grapple with the new reality, which includes cuts to staff.
Volvo makes needed layoffs
On July 8, Volvo was reported to have cut 15% of its workforce, or about 3,000 jobs, a move it announced it would make back in late May.
The layoffs, which are said to affect office-based positions in Sweden, were part of an action plan announced by the carmaker on May 26. Volvo said, “The action plan aims to build a stronger and even more resilient Volvo Cars at a time when the automotive industry is facing considerable challenges in its external environment.”
Now, Volvo is doing another round of layoffs, per reporting from Automotive News. This also affects 15% of its U.S. staff, or around 60 jobs, from its Mahwah, New Jersey, headquarters.
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Volvo Cars President and CEO Håkan Samuelsson made a statement about the first round of layoffs in May, saying, “The actions announced today have been difficult decisions, but they are important steps as we build a stronger and even more resilient Volvo Cars.”
“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. At the same time, we will continue to ensure the development of the talent we need for our ambitious future.”
As of December 2024, Volvo Cars employed approximately 42,600 full-time employees before the layoffs took place.
A sharp decline for Volvo
These changes come after a strong 2024 for Volvo, which reported its best full-year retail sales ever, exceeding $36.5 billion in revenue and selling a record 763,389 vehicles.
Despite this, Volvo knew that headwinds were coming, as evidenced by comments from Volvo Cars CEO Jim Rowan.
“2024 was a year of two halves,” he said. “For the first six months, we recorded strong double-digit volume growth. But like the rest of the industry, we experienced a more challenging second half.”
Volvo also announced in early May that it would abstain from providing financial guidance for 2025 and 2026, citing “external developments and increased uncertainties.”
That said, Volvo continues to march ahead on its EV initiatives. It sold 175,194 fully electric cars in 2025, which is an impressive 54% increase from the prior year.
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