The company will close "non-core and non-competitive operations" and cut jobs across the group's aerospace, vehicle and construction equipment businesses, it said in a statement Monday.

Three European bus production units will be shut and manufacturing concentrated in the group's plant in Poland. Volvo will also close a Canadian car assembly plant.

About 6.7 percent of the company's 79,000 worldwide jobs will be cut, about half of them in Sweden with the rest spread through Europe and Canada. Both white-collar and blue-collar workers will be laid off. In addition, about 700 consultants will also be let go.

"We will be forced to issue notices of termination," Volvo President and CEO Leif Johansson said in a statement. "The Group's earnings capacity is insufficient and we must now take actions to ensure Volvo's long-term competitiveness."

Johansson said he expects the company to save up to 3 billion Swedish crowns ($367.9 million).

Volvo stock rose about 4 percent on the Swedish stock exchange, to 196.5 krona.