Volkswagen plans to cut up to 100,000 jobs worldwide

The CEO of German car giant Volkswagen Group has confirmed it is looking to cut up to 100,000 jobs – more than twice as many as previously announced.

The group, which includes Porsche, Audi, Seat and Skoda as well as the VW brand, has said it will use around 50,000 jobs in Germany by 2030.

In the last year, profits have been declining – falling sales in key markets, as well as increasing competition from Chinese brands entering Europe.

In a widely reported memo to staff, CEO Oliver Blume said the group’s costs were 20% higher than those of rival businesses, and that it needed to cut costs further.

This would mean a “theoretical reduction” of 50,000 jobs worldwide, he said.

“We are currently evaluating how many adjustments are really necessary and feasible across all brands, companies and regions,” he said.

We need to be more efficient, stronger and lighter. We need to cut our costs.

It added that the company was “unable to confirm” alternative uses in Germany for four factories previously threatened with closure.

Two of the plants in Zwickau and Emden are used for electric car production. But together with the Hanover and Neckarsulm factories, they appear expensive to run.

VW’s profits have fallen sharply in recent years. By 2023, it will make a profit of €22.6 billion (£25.8 billion, £19.3 billion). This drops to €19.1bn in 2024, then just €8.9bn last year.

The group has been hit hard by falling sales in China, once one of its most profitable markets. In the first six months of the year, it decreased by 26% compared to last year.

Sales in the U.S. fell more than 7%, partly due to the impact of tariffs on auto imports introduced by the Trump administration.

Meanwhile, Chinese brands are advancing into international markets by introducing new technologies while benefiting from lower production costs than their European rivals.

This has increased pressure on established brands to control their own costs and reduced profit margins.

In the year After threatening a mass strike at the end of 2024, VW has reached an agreement with the German trade union IG Metall to cut 35,000 jobs in a so-called “socially responsible way” by 2030.

The plans being discussed now seem to go a long way.

Last week, there were widespread protests at Volkswagen sites before the start of a meeting of VW’s supervisory board, including labor representatives and company managers.

Some industry analysts told Agence France-Presse that Volkswagen deliberately disclosed the 100,000 figure as a bargaining ploy and suggested that the final cut may be lower.