Volkswagen disclosed plans to reduce its workforce by 50,000 jobs in Germany by 2030. This decision follows a substantial decline in its post-tax profits, which fell by approximately 44% in 2025 to $6.9 billion from $12.4 billion the previous year. The job cuts, announced by CEO Oliver Blume, will impact the entire Volkswagen Group, including brands like Audi and Porsche, and are part of a broader $17.49 billion cost-saving initiative.
The automaker attributes its financial downturn to several factors, including US import tariffs, intense competition from Chinese manufacturers, and high restructuring costs associated with the shift to electric vehicles. The company's operating profit plummeted by 54% to $8.9 billion, and its profit margin decreased to 2.8% from 5.9% a year prior. Deliveries in China, a formerly lucrative market, also dropped by 6%.
The announced job reductions go beyond a prior agreement with unions to cut 35,000 jobs. While the cuts will primarily occur through voluntary measures like early retirement and severance packages, they underscore the severe challenges the company faces. CEO Oliver Blume emphasized the need for rigorous cost reduction, stating, "We are operating in a fundamentally different environment."
Despite the poor 2025 results, Volkswagen anticipates a recovery in the coming year, projecting a core profit margin of 4% to 5.5% for 2026. However, finance chief Arno Antlitz stressed that the current profit margin is unsustainable long-term, highlighting the critical need for continued cost-cutting efforts in the months ahead. The group aims to streamline operations and enhance efficiency to navigate the competitive landscape.
