Volvo has announced that it will cut 3,000 jobs as part of a restructuring plan aimed at slashing costs by 18 billion Swedish Krona (£1.4billion).
The Swedish automaker is grappling with high costs, a slowdown in electric vehicle demand and trade uncertainty.
The move comes as the company attempts to boost its share price and increase demand for its vehicles through business restructuring and cost-cutting measures.
The layoffs represent around 15 per cent of the company's office staff and will affect almost all areas of the business.
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Volvo announced that it would be cutting 3,000 jobs across its workforce
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CEO Hakan Samuelsson said: "It's white collar in almost all areas, including R&D, communication, human resources. So it's everywhere, and it's a considerable reduction," Reuters reported.
Volvo Cars' new CFO, Fredrik Hansson, confirmed that whilst all departments and locations would be impacted, most of the redundancies will occur in Gothenburg, where the company is headquartered.
Samuelsson expressed optimism about the restructuring, adding: "I think it will be very healthy, and will save us money and give space for people to (take on) bigger responsibilities."
The company said it would finalise a new structural set-up by the autumn of this year.
The layoffs are part of a programme unveiled in April by Samuelsson, who was recently brought back to the CEO role after heading the company for a decade until 2022.
Volvo announced that it would be backtracking on some of its electric vehicle targets, after it previously promised to only sell EVs from 2030.
However, the brand said it was forced to amend these targets, noting "additional uncertainties" stemming from waning electric car sales in some markets and the impact of Donald Trump's tariffs.
With most of its production based in Europe and China, Volvo Cars is more exposed to new US tariffs than many European competitors and has indicated it could become impossible to export its most affordable cars to the US.
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The company withdrew its financial guidance last month when announcing the cost cuts, citing unpredictable markets amid weaker consumer confidence and trade tariffs causing turmoil in the global auto industry.
Handelsbanken analyst Hampus Engellau said the number of staff to be laid off was in line with expectations and that the company's move to streamline its operations was positive.
White-collar staff make up around 40 per cent of Volvo's workforce, according to Samuelsson.
The restructuring is part of the company's broader strategy to navigate challenging market conditions, including potential trade barriers that could significantly impact its export capabilities.
Volvo amended its electric vehicle targets last year
VOLVOVolvo said the new structural arrangements would be tailored to make the company "structurally more efficient" across all areas of operation.
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