Volkswagen is planning large-scale layoffs due to a significant drop in profits
The management of Volkswagen, Europe’s largest automaker, has acknowledged that the company is facing a much deeper crisis than previously thought.
Volkswagen remains the world’s second-largest automaker, but it is falling further and further behind the market leader, Toyota Motor Corporation.
The company acknowledges that the business model that ensured its success for decades no longer meets current market conditions.
At the end of 2025, Volkswagen’s net profit fell by approximately 44%—to 6.9 billion euros, down from 12.4 billion euros a year earlier.
In addition, the company reported a decline in total revenue, which was yet another sign of the group’s deteriorating financial situation.
The publication released the results of an internal anonymous survey conducted among members of Volkswagen’s executive board and supervisory board.
The results were disheartening:
- 6 out of 9 executives stated that the situation poses a threat to the company’s survival;
- three others described the situation as tense;
- none of the respondents assessed the situation as problem-free.
Furthermore, every single survey participant, without exception, supported the need for a radical change in the company’s strategy.
Separately, the executives criticized Volkswagen’s approaches in the key markets of China and North America, where the company faces increasingly fierce competition.
In March 2026, the company announced a large-scale optimization program.
By 2030, Volkswagen plans to cut up to 50,000 jobs in Germany, and one of the company’s plants may be completely repurposed.
Volkswagen CEO Oliver Blume stated that the company must focus on producing more affordable cars equipped with modern software.
Among the company’s key projects is the new Cupra Raval, which will cost around 25,000 euros.
According to Blume, it is precisely these models that should help the company regain customer loyalty and strengthen its position in the global automotive market.
Falling profits, plans for large-scale cutbacks, and critical assessments from its own management indicate that Volkswagen is embarking on one of the most challenging phases of transformation in its entire history.
This was reported by the German publication Manager Magazin.
As a reminder, the German automaker Volkswagen has decided to continue producing three-cylinder engines for small cars, despite previous plans to phase them out.
