Berlin – Volkswagen AG announced plans to cut approximately 50,000 jobs in Germany by 2030, following a sharp decline in profits and as the automaker navigates a challenging transition towards electric vehicle production. The announcement, made in the company’s annual report on March 11, 2026, signals a significant restructuring effort for Europe’s largest carmaker.
The company’s net profit after tax fell by 44% to €6.90 billion in fiscal year 2025, the lowest level since 2016, according to the report. This downturn is attributed to a confluence of factors including rising competition from Chinese electric vehicle manufacturers, the impact of U.S. Import tariffs, and increasing production costs.
“In total, around 50,000 jobs are due to be cut by 2030 across the Volkswagen Group in Germany,” Volkswagen CEO Oliver Blume stated in a letter to shareholders. The cuts will extend beyond the core Volkswagen brand to include premium marques Audi and Porsche, as well as the group’s software subsidiary Cariad.
Volkswagen had previously reached an agreement with unions in late 2024 to reduce 35,000 positions by 2030, aiming to save €15 billion annually. The additional cuts announced this week build upon that initial agreement. The company reported cost savings of around €1 billion in the 2025 financial year through collective bargaining agreements and workforce reductions, and remains on track to achieve over €6 billion in net annual cost savings by 2030.
The profit slump comes as Volkswagen faces a 25% tariff on vehicles imported into the United States, adding nearly €3 billion in costs, and intensifying competition in the Chinese market, historically a key region for the company. The company delivered 8.98 million vehicles worldwide in 2025, placing it second only to Toyota in global sales volume. However, Volkswagen remains the largest automotive group in Europe, holding an approximate market share of 26-27%.
Despite the challenges, Volkswagen anticipates an operating profit margin between 4% and 5.5% for 2026, similar to the 4.6% recorded this year. Company leadership expects a gradual recovery in results if the cost reduction plan is rigorously implemented. However, the company’s annual report as well acknowledges that geopolitical tensions, including the ongoing conflict in Ukraine and instability in the Middle East, pose risks to economic growth and could further amplify existing pressures.
With approximately 680,000 employees globally, including nearly 300,000 in Germany, Volkswagen is the largest company in Germany by revenue, generating approximately €322 billion in turnover in 2025. This represents roughly 8% of Germany’s gross domestic product, considering both direct and indirect effects.
The Volkswagen Group encompasses a wide range of brands, including Audi, Lamborghini, Bentley, Seat, Skoda, MAN, Scania, and Volkswagen.
