Volkswagen Group announced on Tuesday that it plans to cut 50,000 jobs by 2030 as the German giant’s profit nearly halved in 2025.
The layoffs affect workers in Germany and across all its brands — which include the Volkswagen brand, Audi, Skoda, Seat/Cupra, Porsche, among others.
The figure shows an increase of roughly 43% compared to the 35,000 cuts the company had previously disclosed.
The announcement came alongside the company’s fourth-quarter earnings report, which showed profits falling to their lowest point since 2016, when the company faced the diesel emissions scandal.
Net profit slumped 44% to €6.4 billion in 2025, as Europe’s largest automaker is facing mounting pressure from weak demand in China and high tariffs in the US.
In a letter to shareholders, CEO Oliver Blume said the layoffs are a “result of collective bargaining agreements and downsizing measures,” through which the company managed to “to achieve cost savings of around €1 billion in fiscal year 2025 as planned.”
Zukunft Volkswagen
Volkswagen, IG Metall, and the company’s Works Council finalized the “Zukunft Volkswagen” restructuring pact in December 2024.
The agreement prohibits plant closures and forces job security until the end of the decade, in exchange for a wage freeze in 2025–2026 and a reduction in technical production capacity by 734,000 units.
Despite being prohibited from forced layoffs, Volkswagen and the representatives agreed on a 35,000 job reduction, through natural attrition (not replacing people who leave the company), early retirement, and voluntary severance packages.
The measures could allow the company to achieve €15 billion ($17.4 billion) in annual savings by 2030, the agreement said.
In Tuesday’s letter, Blume cited the agreement as a “crucial cornerstone” of its corporate responsibility.
“Audi, Porsche and our software subsidiary CARIAD have also set out comprehensive agreements and launched their own cost programs,” the Chief Executive added.
Last month, German media outlet Manager Magazin reported that the VW Group is planning to cut costs by 20% across all brands by the end of 2028.
According to the report, management presented the “massive” savings plan at a closed-door meeting with the firm’s 120 most senior executives in Berlin in mid-January.
Software Partnerships
The German automaker, a market leader in several European countries, is struggling to boost demand for electric vehicles in China and the US, where EV makers were able to gain significant ground but legacy automakers struggle.
One key reason for this is Volkswagen’s software capabilities.
After investing approximately €12 billion in Cariad, its in-house software subsidiary, the company has scaled back the division, which now mainly manages partnerships with software-focused companies, including China’s XPeng and California-based Rivian.
“We are working on offering our customers around the world a superior range of digital services, adapted to the different needs and regulations in the various regions,” Oliver Blume said.
He added that “substantial progress is being made by our joint venture with US company Rivian.”
Rivian and VW formalized their partnership in late 2024, with the German automaker committing $5.8 billion to the EV maker.
Volkswagen will adopt Rivian‘s zonal architecture and software stack for its future electric vehicles. It is set to debut in the upcoming ID.1 model, expected to launch in 2027.
“Around one year on from the joint venture’s creation, the very first test mules for the Volkswagen, Audi and Scout brands are undergoing their first winter tests in spring 2026,” the VW Group‘s CEO added.
Last week, Rivian‘s CFO Claire McDonough pushed back against reports of difficulties at the joint venture, telling investors the relationship is “very strong” and that the partnership is executing faster than the German automaker could have managed alone.
China
Overall, Volkswagen’s total sales in China fell 8% in 2025 across all vehicle types, with battery-electric vehicles experiencing a decline of over 44%.
Volkswagen, once the top-selling automaker in China, lost first place to BYD in 2024 and fell to third behind Geely Auto in 2025.
This decline was partly due to the company’s slow adaptation to China’s rapidly electrifying market.
Volkswagen has partnered with local companies, including FAW Group and XPeng, to develop vehicles better suited to Chinese consumers.
The company launched the China Electric Architecture (CEA) platform, co-developed with XPeng, earlier this year.
The German automaker now plans to build all of its Chinese vehicles on the CEA by 2030, it told Reuters.
The same report revealed that the collaboration between the two ended last year.
“We are already one step further ahead in China, as required by market conditions there,” Blume wrote on Tuesday. “In the space of just 18 months, working with Xpeng, we transformed the China Electronic Architecture from an idea into a cutting-edge E/E architecture that is ready for use in series production.”
