Volkswagen plans 50,000 job cuts in Germany as profits plunge

Wednesday 11 March 2026 - 10:20

By: Dakir Madiha

Volkswagen plans 50,000 job cuts in Germany as profits plunge

Volkswagen plans to eliminate about 50,000 jobs in Germany by 2030 as the automaker accelerates restructuring efforts following a sharp decline in annual profits. The announcement came as the company reported earnings at their lowest level since the 2016 diesel emissions scandal.

Chief executive Oliver Blume outlined the plan in a letter to shareholders included in the group’s annual report. The company currently employs around 287,000 people in Germany. According to Blume, the cuts will affect multiple divisions across the Volkswagen Group.

The scale of the reduction exceeds a previous agreement reached with labor unions in late 2024, when Volkswagen committed to cutting 35,000 positions within its core brand by the end of the decade as part of a program aimed at generating about 15 billion euros in annual savings.

The additional 15,000 job reductions will come from the group’s premium brands Audi and Porsche as well as from Cariad, Volkswagen’s software subsidiary.

Company executives said the reductions will be carried out through natural attrition, early retirement programs, and voluntary departures rather than forced layoffs. The measures follow the restructuring pact known as “Zukunft Volkswagen,” finalized in December 2024, which also prohibits plant closures in Germany until the end of the decade.

The job cuts were announced alongside Volkswagen’s 2025 financial results. The company reported a 53 percent drop in operating profit to 8.9 billion euros on revenue of 321.9 billion euros, which remained broadly stable compared with the previous year. Net profit fell by about 44 percent.

Volkswagen said several factors contributed to the decline. United States tariffs, unfavorable currency movements, and the costly strategic restructuring of Porsche weighed on the company’s performance.

The automaker is also losing ground in China, long its most important growth market. Domestic manufacturers such as BYD and Geely have gained market share as Chinese carmakers narrow the technology gap with international competitors.

In Europe, stagnant demand and the high cost of transitioning to electric vehicles have added further pressure on profitability.

Volkswagen expects its operating margin in 2026 to range between 4 percent and 5.5 percent, which could fall below the adjusted margin of 4.6 percent achieved in 2025 once exceptional charges are excluded.

Chief financial officer Arno Antlitz said further cost reductions will be necessary. He told reporters that strict cost discipline will remain the company’s central priority in the coming months.

Blume acknowledged the structural challenges facing the company and the broader industry. In his letter to shareholders, he wrote that the business model that supported Volkswagen and much of the German automotive sector for decades no longer works in its current form.