Volkswagen will cut an additional 15,000 jobs in Germany by 2030, bringing total planned reductions to 50,000 across its group operations in the country. The announcement comes as Europe’s largest automaker reported its lowest annual profit since 2016, battered by US tariffs, intense competition in China, and high costs for its electric vehicle transition.
CEO Oliver Blume confirmed the expanded job cuts in the company’s annual report, stating they would affect premium brands Audi and Porsche, as well as the software subsidiary Cariad. This builds on a previous agreement with unions to eliminate 35,000 positions, primarily at the core Volkswagen brand, as part of a plan to save €15 billion annually.
The company’s earnings after tax fell approximately 44% last year to €6.9 billion. The decline was driven by multiple factors: US tariffs on non-American vehicles, a loss of market leadership in China to domestic rivals BYD and Geely, and a costly revamp of its Porsche division. Finance chief Arno Antlitz warned the group’s profit margin was insufficient for the long term and emphasized that further rigorous cost reduction was essential for competitiveness.
For 2026, Volkswagen projects a core profit margin between 4% and 5.5%, which could be lower than the 4.6% achieved this year when adjusted for one-time restructuring costs and Porsche’s shift back to petrol engines. The forecast assumes existing US tariffs remain in place, with the company citing significant uncertainties from international trade restrictions, geopolitical tensions, and volatile commodity markets.
Once the dominant force in the world’s largest auto market, Volkswagen’s sales in China have slipped behind local competitors, a critical development given the market’s importance to global volumes. The combination of stagnant European demand, expensive EV investments amid uneven consumer adoption, and the China sales slump has created a severe triple challenge for the manufacturer.
The cuts and renewed cost focus underscore the scale of transformation required as Volkswagen navigates the costly shift to electrification and a highly competitive global landscape. The company stated that achieving its financial targets hinges on strict cost management in the coming months.
