Volkswagen Proposes 100,000 Job Cuts After Profit Slump

The Volkswagen Group announced a radical restructuring plan to eliminate up to 100,000 jobs following a significant slump in second-quarter 2026 profitability. The automaker reported an operating profit of 3.5 billion euros, missing analyst estimates of 4.3 billion euros, while net profit dropped 32.9% to 1.54 billion euros. Consequently, the company scrapped its projected 3% revenue growth for the year, now forecasting a potential decline of up to 3%.

CEO Oliver Blume attributed the downturn to an "unprecedented risk scenario" involving fierce competition from Chinese brands, high U.S. tariffs, and slowing electric vehicle demand. This environment led the company to halt ID.4 production at its Tennessee plant, resulting in a 500-million-euro charge. Blume noted that the company's cost structure is roughly 20% higher than its peers, necessitating the potential closure of four German plants in Hanover, Zwickau, Emden, and Neckarsulm.

CFO Arno Antlitz described the current roughly 4% margin as a "wake-up call" for structural cost reductions. The proposed cuts follow existing plans to eliminate 50,000 jobs in Germany by 2030. These measures face opposition from labor unions and the Government of Lower Saxony, which holds a 20% stake and a majority of supervisory board seats. The financial crisis also affected subsidiaries, with Audi seeing second-quarter revenue fall to 15 billion euros and Porsche undergoing its own restructuring program.