Key facts
- Volkswagen Group CEO Oliver Blume confirmed plans to cut up to 100,000 jobs globally.
- The company's costs are 20% higher than those of rival businesses.
- VW's operating profit fell from €22.6bn in 2023 to €8.9bn last year.
- Sales in China were down 26% in the first six months of the year.
- Sales in the US fell more than 7%.
Volkswagen Group's chief executive, Oliver Blume, has confirmed the company is considering cutting up to 100,000 jobs globally, a figure twice as large as previously stated. This move comes as the German automotive giant faces declining profits and increasing competition, particularly from Chinese brands entering the European market.
In a memo to staff, Blume stated that the Group's costs are 20% higher compared to rival businesses and that significant reductions are necessary. He indicated that the company is assessing the required and feasible number of job adjustments across all brands, companies, and regions to become more efficient, robust, and simpler.
The company's financial performance has seen a steep decline, with operating profit dropping from €22.6bn in 2023 to €8.9bn last year. Sales have also suffered, with a 26% decrease in China during the first six months of the year and a more than 7% fall in the US, partly attributed to tariffs imposed by the Trump administration.
Meanwhile, Chinese brands are aggressively expanding into international markets, offering new technologies and benefiting from lower production costs. This competitive pressure is impacting established manufacturers' profit margins.
Previously, in late 2024, Volkswagen reached an agreement with the German trade union IG Metall to cut 35,000 jobs at its namesake brand and an additional 15,000 at its other brands by 2030, with these cuts to be handled in a "socially responsible manner." The current discussions appear to propose a much larger reduction.
Recent protests have taken place at Volkswagen sites across Germany ahead of a supervisory board meeting. Some industry analysts suggest that the publicized figure of 100,000 job cuts might be a negotiating tactic, with the final number potentially being lower.