Auto giant Volkswagen announced on Tuesday a fall of almost half its net profit in 2025, to its lowest level since the Dieselgate crisis in 2016, and the loss of more jobs.
The group with ten brands has indicated that it wants to cut up to 50,000 jobs in Germany by 2030, as it seeks to reduce costs in the face of fierce competition in China, stagnant demand in Europe and American customs duties.
Audi and Porsche concerned
In addition to the 3,000 job cuts already announced at the end of 2024 within the Volkswagen brand, reductions will also affect the luxury brands Audi and Porsche as well as the software subsidiary Cariad, according to the chairman of the management board, Oliver Blume, in a letter to shareholders.
With these workforce reductions already underway, the Volkswagen group has saved 1 billion euros in 2025 and says it is on track to achieve more than 6 billion euros in annual savings by 2030.
It must accelerate on the economic side after it reported a net result for 2025 falling 44% over one year, to 6.9 billion euros, according to a press release.
It was weighed down by 9 billion euros in additional charges, including 5 billion linked to the change in Porsche’s electric strategy and 3 billion to US customs tariffs, and 1 billion to the ongoing restructuring at Volkswagen.
Customs duties weighed
As a result, operating profit fell by almost 53% to 8.9 billion euros, representing only 2.8% of sales, compared to 5.9% the previous year. Turnover almost stagnated, at 322 billion euros, driven by a total of 9 million vehicles delivered, or 0.2% less over one year.
While sales in Europe and South America showed growth of 5 to 10%, North America suffered from customs duties imposed by Donald Trump (-12%) and Volkswagen had to face tough Asian competition in China (-6%).
For the year 2026, the Wolfsburg group expects its profitability to remain under pressure, due to rising raw material costs, intense competition and geopolitical tensions, which are clouding the outlook. It nevertheless intends to increase its operating margin to a range between 4 and 5.5%.
In China, once its main market, now losing momentum, the group hopes to catch up by launching “the largest product campaign in its history”, with new models designed for the local market.
