Volkswagen To Cut 50,000 Jobs In Germany As Profits Plunge

Volkswagen has announced plans to reduce its workforce in Germany by about 50,000 positions by 2030 after reporting profits at their lowest level since 2016.

The company’s chief executive officer, Oliver Blume, disclosed the planned job cuts in a letter to shareholders contained in the firm’s annual report released on Tuesday.

“In total, around 50,000 jobs are due to be cut by 2030 across the Volkswagen Group in Germany,” Blume said.

The multi-brand automaker had previously reached an agreement with labour unions toward the end of 2024 to eliminate 35,000 jobs by 2030, mainly within the core Volkswagen brand, as part of efforts aimed at saving about 15 billion euros annually.

According to Blume, the latest reduction plan will also affect premium brands Audi and Porsche, as well as Volkswagen’s software arm, Cariad.

The company’s challenges have mounted in recent years. Even before tariffs were imposed by United States President Donald Trump on foreign car manufacturers last year, Europe’s largest automaker had already been grappling with weak demand across the European market, the high cost of investing in electric vehicles amid uneven consumer uptake, and declining sales in China.

Volkswagen, once the dominant force in the Chinese automotive market, has increasingly faced stiff competition from domestic manufacturers, with its sales now trailing behind those of BYD and Geely.

The company reported that net profit dropped by about 44 per cent last year, attributing the decline to US tariffs, intense competition in China, and the expensive restructuring of Porsche.

Total earnings after tax stood at 6.9 billion euros (about $8 billion), marking the group’s weakest financial performance since 2016. That year, the automaker incurred billions of euros in exceptional costs linked to vehicle recalls and legal penalties following the Volkswagen emissions scandal.

Warning about the company’s long-term financial outlook, Volkswagen’s finance chief, Arno Antlitz, said the firm must intensify its cost-reduction strategy.

“We can only realise this if we continue to rigorously reduce costs,” he said. “That is what we will focus on in the coming months.”

Looking ahead to 2026, the automaker said it expects a core profit margin of between 4 and 5.5 per cent. This could fall below the 4.6 per cent margin achieved this year after adjusting for one-off restructuring expenses and the costs associated with Porsche’s partial shift back to petrol-powered vehicles.