Volkswagen AG announced plans to cut 50,000 jobs by the end of the decade, citing falling sales in China and North America, alongside the impact of U.S. Tariffs imposed by the Trump administration. The announcement, made Tuesday, follows a previously agreed-upon plan with German trade unions to reduce the workforce by 35,000 through attrition by 2030.
The job cuts will affect the entire group, including its luxury brands Porsche and Audi, and will primarily take place in Germany. The move comes as Volkswagen reported a 54% drop in pre-tax profits, falling to €8.9 billion (approximately £6.6 billion). The company also indicated it is scaling back its electric vehicle (EV) production targets, including at Lamborghini.
Volkswagen CEO Oliver Blume attributed the profit decline largely to the impact of U.S. Tariffs, as well as a costly strategic shift at Porsche, which has delayed its transition to EVs due to weaker-than-expected demand. Porsche’s operating profit plummeted 98% in 2025, reaching just €90 million.
The deteriorating global economic climate is also contributing to the company’s challenges. “Challenges are expected in particular from the macroeconomic environment, uncertainties regarding restrictions in international trade and geopolitical tensions,” Volkswagen stated. The company warned of increased “competitive intensity” and volatility in commodity, energy, and foreign exchange markets.
Blume acknowledged the impact of geopolitical instability, specifically referencing the US-Israeli military action against Iran. Whereas he stated the conflict isn’t currently disrupting Volkswagen’s supply chain, he cautioned it could affect demand for Audi and Porsche, brands with high margins but relatively modest sales volumes in the region. “We are simply seeing how volatile and fragile our world is, with new issues arising every month,” Blume said.
The company’s financial chief, Arno Antlitz, emphasized the need for continued cost reduction and increased efficiency. “We can only realise this if we continue to rigorously reduce costs, leverage group synergies, reduce complexity and thus sustainably increase profitability,” he added. Antlitz also stated Volkswagen intends to maintain its combustion engine technology while continuing to invest in EVs and software development, particularly in the United States.
Despite the challenging environment, Volkswagen is launching “the largest product campaign in our history” in China to regain market share, following a period of flat demand in Europe and increased domestic competition. Blume noted that after three years of restructuring, the group is seeing “tangible progress,” but operating in a “fundamentally different environment.”
The news from Volkswagen comes as other automakers are also adjusting to a changing landscape. Renault announced plans to achieve 100% electric vehicle sales in Europe by 2030, with a target of 50% outside of Europe. Renault is collaborating with Google to develop a new EV platform based on Android technology, aiming for 90% remote software update capability and ultra-fast charging times of under 10 minutes.
