Geely's Subsidiary to Cut 3,000 Jobs Amid High Costs and Weaker Demand

Geely Automobile Holdings Limited’s GELYY subsidiary, Volvo Cars, is set to cut 3,000 mostly white-collar jobs as part of a restructuring effort first revealed last month as it struggles with high costs, weakening demand for electric vehicles, and growing trade uncertainty.

The job cuts come as the Swedish automaker attempts to revive its struggling share price and boost demand. CEO Hakan Samuelsson, who returned to lead the company after previously serving as CEO until 2022, introduced a cost-cutting plan in April targeting $1.9 billion in savings. A significant portion of these savings will come from reducing white-collar roles, which make up 40% of the company’s workforce.

Of the 3,000 positions being eliminated, around 1,000 are consultant roles, mainly in Sweden, along with roughly 1,200 regular employees in Sweden and the rest across global markets. Per Samuelsson, the restructuring will reduce expenses and enable employees to take on greater responsibilities. The job cuts represent about 15% of Volvo Cars’ office workforce and will cost the company 1.5 billion crowns in one-time restructuring expenses.

Volvo Cars has most of its manufacturing based in Europe and China and is more vulnerable than most of its European counterparts to new U.S. tariffs and may be unable to export its more affordable models to the United States. The company plans to implement a new organizational structure by autumn.

Volvo Cars had previously withdrawn its financial outlook due to market volatility, declining consumer confidence and trade tensions affecting the global auto sector. Earlier this month, the automaker reported an 11% year-over-year drop in global sales for April.

Volvo Cars was acquired by China’s Geely from U.S. automaker Ford in 2010. Although it announced in 2021 that all its vehicles would be electric by 2030, it scaled back those plans last year due to uncertainties, including tariffs on EVs in various regions. Recently, U.S. President Donald Trump threatened to impose a 50% tariff on European Union imports starting June 1, but later postponed it to July 9 to allow time for negotiations between Washington and Brussels.

GELYY’s Zacks Rank & Key Picks

Geely carries a Zacks Rank #3 (Hold) at present.

Some better-ranked stocks in the auto space are CarGurus, Inc. CARG, Strattec Security Corporation STRT and Michelin MGDDY, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for CARG’s 2025 sales and earnings implies year-over-year growth of 4.96% and 25%, respectively. EPS estimates for 2025 and 2026 have improved 35 cents and 44 cents, respectively, in the past 30 days.

The Zacks Consensus Estimate for STRT’s fiscal 2025 sales and earnings implies year-over-year growth of 3.49% and 8.11%, respectively. EPS estimates for fiscal 2025 and 2026 have improved 73 cents and 91 cents, respectively, in the past 30 days.

The Zacks Consensus Estimate for MGDDY’s 2025 sales and earnings implies year-over-year growth of 0.43% and 37.76%, respectively. EPS estimates for 2025 and 2026 have improved a penny and 4 cents, respectively, in the past seven days.

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This article originally published on Zacks Investment Research (zacks.com).

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