Volkswagen Group is considering cutting as many as 100,000 jobs worldwide as it battles falling profits, weakening demand in key markets and intensifying competition from Chinese automakers.
The proposed cuts, confirmed by Chief Executive Officer Oliver Blume, are double the 50,000 job reductions previously announced for Germany by 2030. The Volkswagen Group owns brands including Volkswagen, Porsche, Audi, Skoda and Seat.
In a memo to employees, Blume said the company’s operating costs are about 20% higher than those of key competitors, making deeper cost reductions unavoidable.
“We need to become more efficient, more robust and simpler. We must reduce our costs,” Blume said, adding that the company is reviewing staffing needs “across all brands, companies and regions.”
He noted that the theoretical reduction could amount to 50,000 additional jobs globally, although the final figure is still under assessment.
Volkswagen is also yet to find alternative uses for four German factories previously identified as being at risk of closure. The plants, located in Zwickau, Emden, Hanover and Neckarsulm, are considered expensive to operate. Two of them currently produce electric vehicles.
The planned restructuring comes as the German automaker faces a sharp deterioration in financial performance. Operating profit fell from €22.6 billion in 2023 to €19.1 billion in 2024 before plunging further to €8.9 billion last year.
The decline has been driven largely by weaker sales in China, once Volkswagen’s most profitable market. Vehicle sales there dropped 26% in the first half of the year compared with the same period last year.
The company has also been affected by a more than 7% decline in US sales, partly due to tariffs on imported vehicles introduced by the Trump administration.
At the same time, Chinese automakers have expanded aggressively into global markets, leveraging lower production costs and rapid advances in electric vehicle technology to challenge established European manufacturers.
Volkswagen had already agreed in late 2024, following negotiations with German labour union IG Metall, to eliminate 35,000 jobs at its core Volkswagen brand by 2030 through voluntary and socially responsible measures. Another 15,000 positions were earmarked for cuts across its other brands.
The latest proposals suggest the restructuring could extend well beyond those earlier plans.
The announcement follows protests by workers at Volkswagen facilities across Germany ahead of a supervisory board meeting attended by company executives and labour representatives.
Some industry analysts believe the figure of 100,000 job cuts may be part of Volkswagen’s negotiating strategy with unions and expect the final number to be significantly lower.
The potential downsizing underscores the growing challenges facing Germany’s automotive industry as legacy manufacturers struggle to adapt to slowing demand, rising production costs and fierce competition from China’s fast-growing electric vehicle sector.
