Volkswagen Group is considering what was previously unthinkable: closing up to four factories in Germany and instituting layoffs that would shrink the workforce by 15 percent.
2025 was a bad year for Europe’s largest automaker. Its sales were essentially flat, but profits were anything but, dropping 44 percent to just 6.9 billion euros ($7.9 billion) as operating margins more than halved. The red ink looks set to continue bleeding through 2026, and in March, the company announced it would cut 50,000 jobs in Germany by 2030 as part of a plan to adapt. Now, according to a report in Manager Magazin, those job losses may double.
The automaker did well selling EVs in Europe last year, but sales in North America and China fell and continue to fall, and tariffs have had a significant effect.
In April, VW Group CFO and COO Arno Arnitz told investors that the company’s operating margin was “far too low” and that it would have to fundamentally transform its business model to cut costs and increase efficiency without tanking quality. That would require “significantly reducing complexity—in our product portfolio and technology platforms, as well as in the number of entities and decision-making layers,” Arnitz said.
