The firm says the layoffs will mainly impact office-based positions in Sweden, representing about 15% of its white collar workforce.
Last month, Volvo Cars, which is owned by Chinese group Geely Holding, announced an 18 billion Swedish kronor ($1.9bn; £1.4bn) "action plan" shake-up of the business.
The global motor industry is facing a number of major challenges including US President Donald Trump's 25% tariffs on imported cars, higher cost of materials and slower sales in Europe.
The chief executive of Volvo Cars, Håkan Samuelsson, pointed to the "challenging period" faced by the industry as a reason for the layoffs.
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