Asger Risom
Volkswagen plans to cut 50,000 jobs in Germany by 2030 after reporting a 44% drop in profits. The sweeping layoffs are part of a restructuring aimed at saving €6 billion annually as the automaker faces rising costs, tariffs and stronger competition in China.
Volkswagen plans to cut around 50,000 jobs in Germany by 2030, as Europe’s largest automaker launches a sweeping restructuring effort following a dramatic collapse in profits.
The scale of the cuts was revealed by CEO Oliver Blume in a letter to shareholders released alongside the company’s latest financial results. The layoffs are part of a broader plan to slash costs and stabilize the company as it faces slowing demand, intensifying competition in China and growing geopolitical pressures.
A sweeping restructuring across the group
“In total, around 50,000 jobs are expected to be cut by 2030 within the Volkswagen Group in Germany,” Blume wrote.
The figure includes the 35,000 job cuts already announced in 2024 within the core Volkswagen brand, but the new plan expands reductions to other parts of the company as well. According to the group, workforce reductions will also affect luxury brands Audi and Porsche as well as the software subsidiary Cariad.
Volkswagen says the restructuring is aimed at making the company more efficient and financially resilient. The goal is to generate €6 billion in annual savings by 2030, with early measures already producing results. The company reports that cost-cutting efforts delivered roughly €1 billion in savings during 2025.
Profits plunge despite stable sales
The urgency of the restructuring became clear in Volkswagen’s latest financial results.
The company reported net profit of €6.9 billion in 2025, a 44 percent drop compared with the previous year. Operating profit fell even more sharply, declining nearly 53 percent to €8.9 billion, leaving the group with an operating margin of just 2.8 percent.
Revenue itself remained largely unchanged at €322 billion, while global vehicle deliveries totaled around 9 million units, a slight decline of 0.2 percent year-on-year.
Volkswagen said the sharp drop in profitability was partly driven by €9 billion in additional costs during the year. These included €5 billion linked to Porsche’s shift in electric vehicle strategy, €3 billion related to U.S. tariffs, and €1 billion tied to ongoing restructuring inside the group.
Mounting pressure in China and global markets
The results reflect the increasingly difficult environment facing global automakers.
Volkswagen saw sales growth in Europe and South America, where deliveries rose between five and ten percent. But the company struggled in two of its most important markets.
Sales in North America fell by 12 percent, largely due to the impact of tariffs, while China — historically Volkswagen’s largest market — recorded a 6 percent drop in deliveries. Local Chinese manufacturers have rapidly gained ground in recent years, particularly in electric vehicles, forcing foreign carmakers to rethink their strategies.
To respond, Volkswagen plans what it describes as the largest product campaign in its history in China, introducing new models specifically designed for local consumers.
Profitability still under pressure
Looking ahead, Volkswagen expects profitability to remain strained in 2026 due to rising raw material costs, geopolitical tensions and continued global competition.
However, the company believes its restructuring plan will gradually improve its financial position. It forecasts an operating margin between 4 percent and 5.5 percent next year.
The planned layoffs underline how dramatically the automotive industry is changing. As manufacturers invest heavily in electrification and software while facing new competitors and trade tensions, even established giants like Volkswagen are being forced into painful restructuring.
Sources: 20 Minutes, AFP
