Volvo Cars to cut 2,500 jobs; shares plunge 28% on China slump and Q3 loss

Volvo Cars plans to cut 2,500 jobs after a severe decline in its Chinese market weighed on third-quarter earnings, the Swedish automaker said Friday, sending its shares down more than 28%.

The company reported an operating loss of 5.6 billion Swedish kronor ($563.7 million) for the third quarter, compared with an operating profit of 6.4 billion kronor in the previous period.

Volvo blamed a deteriorating environment led by "tougher" market conditions in China and the US, which it said negatively affected free cash flow.

Shares fall after European open

Shares in Volvo Cars were last down more than 28% after the European market opened. The fall followed the release of the third-quarter results and the company's plan to reduce its workforce.

Volvo is a Swedish carmaker, and China and the US are among the markets where it competes. The initial report did not say which regions, plants or business units would be affected by the 2,500 reductions, or when they would take effect. It also did not include any estimate of the savings the job cuts might produce or what they might cost to carry out.

Key figures from the report

- Job cuts planned: 2,500
- Third-quarter operating loss: 5.6 billion Swedish kronor ($563.7 million)
- Operating profit in the previous period: 6.4 billion kronor
- Share price move: down more than 28% after the European open
- Factors cited: tougher market conditions in China and the US; weaker free cash flow

CNBC reported the news as breaking and said further updates would follow. The operating loss was reported as 5.6 billion Swedish kronor, or $563.7 million.

Source: CNBC Top News.