Volkswagen is intensifying its cost-cutting measures in Wolfsburg following a massive slump in profits, planning to eliminate around 50,000 jobs across the entire group in Germany by 2030. The automaker announced this after already reaching an agreement with unions at the end of 2024 to reduce 35,000 jobs, primarily at its core brand. The more drastic cuts are due to a net profit that fell to €6.9 billion, the burden of US tariffs, and problems at its subsidiary Porsche. As a result, the board is significantly tightening its austerity program, while uncertainty is growing for tens of thousands of employees and the company continues to struggle with insufficient returns. (t-online: 10.03.26)
Profit slump pushes Volkswagen to its weakest level since 2016
Net profit plummeted by almost half last year. This also means Volkswagen’s lowest result since the diesel scandal in 2016. The profit slump marks a turning point, as the company is earning significantly less despite stable revenues.
Even adjusted for special items, the situation remains strained. The operating margin was only 4.6 percent, whereas it would have reached 5.5 percent without customs duties. Chief Financial Officer Arno Antlitz nevertheless declared that this was “not sufficient in the long term.” He therefore announced that Volkswagen would “continue to systematically reduce our costs.”
Stable revenues don’t mask the weakness
With just under €322 billion, the Group’s revenue remained almost at the previous year’s level. The decline was only 0.8 percent, but this figure masks the true extent of the company’s difficulties. High revenues are of little use if significantly less profit remains at the end.
Regionally, the picture is contradictory. In Europe, sales rose by five percent, while South America saw an increase of ten percent. In North America, however, sales fell by twelve percent, and in China they declined by six percent. As a result, Volkswagen sold just under nine million vehicles worldwide.
Electric cars are growing, but the transformation is getting tougher
The Volkswagen Group is reporting progress in its electric vehicle business. The share of fully electric vehicles in its order backlog rose to 22 percent, and sales of electric cars increased by 55 percent. However, this growth has not yet compensated for the burdens of weaker markets, tariffs, and the Porsche problems.
At the end of 2024, Volkswagen employed around 293,000 people in Germany, while worldwide the number was 662,900 in 2025. This already represented a decline of 2.4 percent compared to the previous year. For 2026, the Group expects a return on sales of only between 4.0 and 5.5 percent. The renewed drop in profits therefore provides management with the justification to significantly intensify the transformation in Germany.