Car giant VW to cut 50,000 jobs by 2030

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Volkswagen Group boss Oliver Blume takes a multi-million-euro pay cut as the firm reels from "global headwinds," Trump’s tariffs, and a brutal price war in China

Rosalía Sánchez

Tuesday, 10 March 2026, 17:43

The Volkswagen Group saw its operating profit fall by more than half last year to 8.9 billion euros. With operating costs increasing, the company estimates that 50,000 people will face lay-offs over the next four years.

Last year, return on sales deteriorated from six to 2.8 per cent - the worst figure since 2015 and 2016, when the group was rocked by the diesel scandal. CEO Oliver Blume has announced their intention to "keep the group on a stable path in the face of increasing global headwinds", a veiled allusion to new tariffs and the looming new energy crisis.

For the current year, Blume maintains a stable or slightly increasing sales outlook and expects the return on sales to improve by four to 5.5 per cent. The forecast is contingent on current international trade tariffs remaining largely unchanged. Trump's protectionism and defence-driven reactions are making export planning extremely difficult.

The restructuring initiated last year by the Porsche sports car brand had a particularly strong impact on the accounts, resulting in special costs of around five billion for the group. New US import tariffs added a burden of approximately three billion for Volkswagen. The realignment of Audi and the Cariad software unit also proved costly.

Deliveries in 2025 fell to fewer than nine million vehicles. Sales stagnated at 322 billion euros. The number of employees worldwide is still around 663,000. At Volkswagen AG alone - an organisational superstructure with large bases such as Wolfsburg, Emden or Hannover - 35,000 jobs will be lost, according to the agreement with the IG Metall union. Audi, Porsche and the software division will together make up the total figure of 50,000 jobs.

How the news will impact on Spain is unknown. 2026 was supposed to be the "Year of the Electric" for Spain, with the launch of the CUPRA Raval in Martorell. While this project remains a priority, the wider collapse in VW’s profits means the "blank cheque" for Spanish expansion has been torn up.

Spanish unions UGT and CCOO have managed to secure "peace" in Navarra for the 2026 production cycle, but the mood in Martorell is more cautious. With the CUPRA Raval set for its global debut in Barcelona this month, all eyes will be on whether the Group commits to the second electric platform that workers say is "essential for survival."

For now, Spain remains a strategic hub, but as the energy crisis sends Spanish wholesale electricity prices up by 700%, the cost of building cars in the sun has never been higher.

The group's brands for relatively affordable cars (namely, the main VW brand and the Škoda brand) performed relatively well and even generated more profit than Audi. Porsche, on the other hand, barely made any profit in 2025. Based on the strong performance of the VW and Škoda brands, the board is now considering a "recognition bonus" for employees.

Blume has seen his annual salary drop to just over six million from nine million the previous year. Performance-based payments for Blume's work at the top of Porsche have fallen to zero and the VW Group's board of management is also reducing its compensation by eleven per cent.

In total, senior management is forgoing 3.5 million euros. The issue is sensitive because bonuses had recently caused some controversy. Last year's inflow of funds was somewhat better than expected and certain thresholds were reached that would have allowed for bonus payments despite the crisis, but management has decided against it.

According to management, the fact that the last quarter of last year went better than previous quarters is encouraging. Volkswagen now intends to maintain this momentum with the market launch of 20 new models, many of them electric.

The 13 per cent increase in incoming orders in Europe is also optimistic. Volkswagen's Osnabrück plant, which produces the T-Roc Convertible, will switch to producing military vehicles in 2027, spearheading a very promising capacity conversion programme for management. The group acknowledges that "the price war is fierce", especially in China, where VW has recently lost much of its market share. Sources add that "nothing can be expected from the expansion in the US either".