Volkswagen Launches Major Restructuring, Plans to Cut 100,000 Jobs Amid Profit Decline

Volkswagen is advancing a comprehensive structural overhaul, driven primarily by sustained pressure on profitability rather than solely by declining sales volumes. The company employs approximately 657,000 people globally and plans to cut up to 100,000 jobs—representing 15% of its total workforce. Of these, closing four plants in Germany alone would affect more than 45,000 positions. Additionally, Volkswagen intends to reduce its investment budget over the next five years by roughly 15%, adjusting it to just above €130 billion. In the first quarter of 2025, Volkswagen reported revenue of €75.7 billion, down 2% year-over-year; vehicle deliveries totaled 2 million units, a 7% decline; operating profit stood at €2.5 billion, down 14.3%; and the operating return on sales decreased from 3.7% to 3.3%. Excluding special items, the operating margin was 4.3%. Meanwhile, net cash flow from the automotive segment reached €2.0 billion in the quarter, compared to a negative €0.8 billion in the same period last year. The company had already reduced indirect costs by approximately €1 billion but was unable to halt the downward trend in operating profit. So far this year, Volkswagen’s share price has fallen by more than 25%. At the same time, its order backlog in Europe has increased by about 15% year-over-year.