The chief executive of Volkswagen Group has confirmed it is looking to cut up to 100,000 jobs globally – twice as many as previously stated. Oliver Blume delivered the news in a widely-reported memo to staff, warning that the German car giant’s costs were 20% higher than rival businesses and needed to be reduced even further.
The group, which owns Porsche, Audi, Seat and Skoda as well as the VW brand, had previously announced it would axe some 50,000 posts in Germany by 2030. But a steep decline in profits has forced a more radical approach. Operating profit fell from €22.6bn in 2023 to €19.1bn in 2024, and then to just €8.9bn last year.
“Volkswagen CEO confirms plans to cut up to 100,000 jobs globally, double previous target, amid falling profits and Chinese competition.”
“We are currently assessing across all brands, companies and regions how many adjustments are actually necessary and feasible,” Blume wrote. “We need to become more efficient, more robust and simpler. We must reduce our costs.”
The planned cuts, which Blume described as a “theoretical loss” of 50,000 jobs worldwide, come as VW struggles with falling sales in key markets. In China, once one of its most lucrative markets, sales dropped 26% in the first six months of the year compared with a year earlier. US sales fell more than 7%, partly because of tariffs on car imports introduced by the Trump administration.
At the same time, Chinese brands have been moving aggressively into international markets, introducing new technologies while benefiting from lower production costs than European rivals. This has slashed profit margins for established automakers.
Four factories in Germany – in Zwickau, Emden, Hanover and Neckarsulm – have previously been threatened with closure. Two of the plants, Zwickau and Emden, are used for electric car production, but all are seen as expensive to run. Blume said the company had been “unable to confirm” alternative uses for them.
In late 2024, after threats of mass strikes, VW reached an agreement with the German trade union IG Metall to cut 35,000 jobs at its namesake brand by 2030 in a “socially responsible manner”, with another 15,000 jobs to go at its other brands. The plans now under discussion appear to go much further.
Last week saw widespread protests at Volkswagen sites across the country, ahead of a meeting of VW’s supervisory board, which includes labour representatives as well as company managers.
Some industry analysts suggested to Agence France Presse that Volkswagen had deliberately publicised the number of 100,000 as a negotiating tactic, and that the final figure of cuts is likely to be lower. The move signals a deepening crisis for Germany’s once-mighty car industry.