Volkswagen Considers Cutting Up to 100,000 Jobs Globally Amid Sales Slump

Volkswagen Group is contemplating a significant global workforce reduction, potentially eliminating up to 100,000 jobs. This figure is double the number previously reported, which focused on 50,000 job cuts in Germany by 2030. The German automotive giant, which includes brands like Porsche, Audi, Seat, and Škoda, is facing financial pressure from declining sales in key markets and intensifying competition from Chinese automakers expanding into Europe.

In a memo to employees, CEO Oliver Blume stated that the group's costs are 20 percent higher than competitors'. To address this, the company must implement further cost reductions. Blume indicated that the company is currently assessing the necessary and feasible changes across all its brands, companies, and regions to become more efficient, resilient, and simpler. He also noted that alternative uses for four German factories previously threatened with closure could not be confirmed.

Volkswagen's profits have seen a sharp decline in recent years. Operating profit fell from 22.6 billion euros in 2023 to 19.1 billion euros in 2024, and further to just 8.9 billion euros last year. The company has been particularly impacted by a sales slump in China, once a highly profitable market, with sales down 26 percent in the first half of this year compared to the same period last year. Sales in the United States have also dropped by over seven percent, partly due to tariffs imposed by the Trump administration.

Simultaneously, Chinese manufacturers are aggressively capturing international markets with new technologies and lower production costs, increasing pressure on established automakers to control expenses while profit margins shrink. Earlier, Volkswagen had reached an agreement with the German union IG Metall to reduce 35,000 jobs within the Volkswagen brand by 2030 in a "socially responsible manner," with an additional 15,000 jobs planned for elimination across other group brands. The current discussions suggest a far more serious scale of potential job losses.

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We must become more efficient, resilient, and simpler. We must reduce costs.