Wolfsburg: Volkswagen has announced plans to cut 50,000 jobs in Germany by 2030, following a significant drop in profits. The job cuts will affect the entire Volkswagen Group, including its subsidiaries Audi and Porsche.
According to Ghana Web, Europe's largest carmaker reported a 44% decline in post-tax profits in 2025, marking the lowest level since 2016. The company attributed this downturn to several factors, including U.S. import tariffs, intense competition from Chinese brands, and high restructuring costs associated with the transition to electric vehicles.
Volkswagen's Chief Executive, Oliver Blume, addressed shareholders in the company's annual report, stating that the job reductions would be necessary to adapt to the changing business environment. Blume emphasized the need for cost-cutting measures to ensure the group's financial recovery in the coming years.
The company has already reached an agreement with unions to eliminate more than 35,000 jobs across Germany by 2030 in a "socially responsible manner," aiming to save approximately £12.4 billion. Volkswagen, along with other German carmakers, has been experiencing a decline in demand in China, which was previously a lucrative market. Meanwhile, Chinese brands have expanded into Europe, intensifying competition.
The decision by former U.S. President Donald Trump to impose 25% tariffs on car imports further exacerbated Volkswagen's challenges. In its annual financial report, the automaker revealed a drop in net profit after tax from £10.7 billion to £6.1 billion last year. For 2026, Volkswagen projects a core profit margin of between 4% and 5.5%, potentially lower than the 4.6% achieved this year.
Volkswagen's finance chief, Arno Antlitz, warned that the current profit margin is "not sufficient in the long run," stressing the need for continued cost reduction efforts. "We can only realize this if we continue to rigorously reduce costs," Antlitz stated, highlighting the company's focus on cost-cutting in the upcoming months.