Volkswagen Plans Major Layoffs After Severe 2025 Profit Decline
- Volkswagen reported a 44% drop in 2025 net profit to 6.9 billion euros, the worst since the diesel scandal.
- The company plans to cut 50,000 jobs in Germany by 2030, exceeding prior union agreements for 35,000 reductions.
- Operating profit nearly halved to 8.9 billion euros due to trade barriers, China sales decline and US tariffs.
- Job cuts will occur through voluntary departures, early retirements and agreements, with no plant closures or involuntary layoffs.
- Shares rose nearly 4% following the announcement amid broader market gains.
Volkswagen Group plans to reduce 50,000 jobs in Germany by 2030 after its 2025 net profit fell 44% to 6.9 billion euros, marking the lowest level since the 2015 diesel emissions scandal. The automaker cited pressures from trade barriers, weakening sales in China against local competitors and US tariffs for the operating profit drop to 8.9 billion euros.[1][4]
Financial Performance and Cost Pressures
Volkswagen's net profit declined 44% to 6.9 billion euros in 2025, with operating profit nearly halving to 8.9 billion euros. The company faces headwinds from US tariffs, a price war in China with rivals like BYD, and high labor and energy costs in Germany. CEO Oliver Blume described the savings plan as massive, targeting 20% cost reductions across brands by 2028.[1][2]
Job Reduction Agreement Details
The 50,000 job cuts exceed the 35,000 agreed with unions in late 2024 after intensive talks, which ruled out plant closures and involuntary layoffs.[1][4] Around 20,000 voluntary departures via early retirement, normal retirement or termination agreements are already contracted.[3] All 10 German plants remain open, though two smaller sites will end car production, with technical capacity reduced by over 700,000 vehicles.[1][3]
Union Negotiations and Savings Measures
Talks with IG Metall lasted 70 hours, involving 100,000 workers in strikes. Employees agreed to forgo wage increases and bonuses through 2030, saving 1.5 billion euros annually in labor costs.[1][5] Volkswagen HR head Gunnar Kilian noted measurable progress on factory costs at sites like Wolfsburg.[3] German Chancellor Olaf Scholz called the deal a good, socially acceptable solution.