Volkswagen plans to cut up to 100,000 jobs globally amid profit decline

Volkswagen Group is set to reduce its workforce by up to 100,000 jobs globally, as confirmed by CEO Oliver Blume on July 13, 2026. This figure is double the previously announced cuts of 50,000 jobs in Germany by 2030. The decision comes after a significant drop in profits, attributed to declining sales and growing competition from Chinese automakers.

Reasons Behind Volkswagen's Job Cuts

In a memo to staff, Blume highlighted that the company's costs are 20% higher than those of its competitors, necessitating further reductions in expenditures. He stated, "We need to become more efficient, more robust and simpler. We must reduce our costs." This dire situation follows a sharp decline in profits, with operating profit falling from €22.6 billion in 2023 to just €8.9 billion in 2025.

The automotive giant has faced challenges in key markets, particularly in China, where sales dropped by 26% in the first half of the year compared to the previous year. Additionally, sales in the U.S. fell by over 7%, partly due to tariffs on imports. These factors have intensified pressure on Volkswagen to manage costs more effectively.

Impact on Factories and Production

Volkswagen is currently evaluating the future of four factories in Germany that are at risk of closure, including those in Zwickau and Emden, which focus on electric car production. Blume noted that the company has been "unable to confirm" alternative uses for these facilities. The plants in Hanover and Neckarsulm are also considered expensive to operate.

In late 2024, VW reached an agreement with the German trade union IG Metall to cut 35,000 jobs at its core brand by 2030, alongside 15,000 job cuts across its other brands. However, the current plans suggest a more extensive reduction in workforce.

Industry Reactions and Future Outlook

Following the announcement, protests erupted at various Volkswagen sites as employees voiced their concerns about job security. Analysts have speculated that the company might be using the 100,000 job cut figure as a negotiating tactic, suggesting that the final number of layoffs could be lower.

The German car industry, once a dominant force, now finds itself at a crossroads. The competition from Chinese brands is reshaping the market, prompting established manufacturers like Volkswagen to re-evaluate their operational strategies to maintain profitability.