Volkswagen to cut 50,000 jobs by 2030 as profit drops

Volkswagen to Cut 50,000 Jobs by 2030 as Profit Drops

FAST WOLFSBURG, Germany - Volkswagen announced on Tuesday (Mar 10) its plan to reduce 50,000 jobs in Germany by the year 2030 as the company's profit fell to its lowest level since 2016. CEO Oliver Blume highlighted the necessity of these cuts in a letter to shareholders, emphasizing the company's need to enhance competitiveness through cost reduction. The Volkswagen Group, which encompasses 10 brands, had already reached an agreement with unions in late 2024 to eliminate 35,000 jobs by 2030, primarily affecting its namesake brand. Additional reductions will come from premium brands Audi and Porsche, as well as the software subsidiary Cariad.

Even before the implementation of tariffs by US President Donald Trump last year, Volkswagen faced challenges including stagnant demand in Europe, high investment costs in electric vehicles despite fluctuating demand, and declining sales in China. As the largest automaker in the Chinese market, Volkswagen is now contending with fierce competition from local rivals like BYD and Geely. The company's earnings after tax decreased by approximately 44% last year, with factors including US tariffs, competition in China, and the expensive overhaul of Porsche.

Volkswagen's earnings in 2016 were also impacted by recalls and legal issues related to diesel emissions cheating. Financial boss Arno Antlitz has stressed the importance of continuing cost-cutting measures to ensure the company's long-term viability. For 2026, the group anticipates a core profit margin between 4 and 5.5%, potentially lower than the 4.6% achieved this year, adjusted for restructuring costs and the extended production of petrol vehicles at Porsche due to weak demand for electric vehicles. The forecast assumes the continuation of tariffs imposed by Trump, with uncertainties in international trade and geopolitical tensions, along with volatile commodity and energy markets, posing further challenges.

Source: AFP/fh