Volvo Rolls Out Major Cost-Cutting Plan to Offset U.S. Tariffs
(MENAFN) Volvo has unveiled an initiative valued at approximately 18 billion Swedish krona ($1.8 billion) aimed at cutting expenses in response to the financial strain caused by U.S. tariffs.
"To protect profitability and drive structural efficiencies on direct and indirect costs, as well as helping to offset external headwinds, the company has launched an accelerated cost and cash action plan," Volvo announced on Tuesday.
The automaker indicated the plan is scheduled for implementation by 2026 and will target both flexible cost measures and reductions in indirect expenditures.
"The reductions in investments are in addition to the already planned lower investments going forward, as previously communicated," the company noted.
"As part of the action plan, there will be redundancies at its operations around the globe, but the company will come back with more details as soon as possible."
According to Volvo, profitability has been affected by a combination of more difficult market dynamics, declining sales volumes, intensified pricing pressure, and the impact of tariffs.
“The automotive industry is in the middle of a very difficult period with challenges not seen before,” stated Hakan Samuelsson, CEO of Volvo Cars.
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