Volkswagen profit plunges, weighs up to 100,000 job cuts

Volkswagen reported a sharp drop in quarterly profit, slashed its 2026 sales forecast, and confirmed plans to cut up to 100,000 jobs amid intensifying competition from Chinese automakers and a costly shift to electric vehicles. Net profit fell 32.9% to €1.54 billion in the second quarter, while operating profit declined nearly 10% to €3.5 billion, missing analyst expectations Source: CNA, CNBC. The company now expects sales revenue to be flat or fall up to 3% this year, reversing an earlier forecast of up to 3% growth Source: CNBC.

Key drivers of the slump

• Chinese market weakness: VW deliveries in China fell more than 31% in the first half of the year, as domestic rivals gain ground Source: The Guardian.
• EV troubles: The discontinuation of the ID.4 in the U.S. cost €500 million, and “negative mix effects” from selling more lower-margin products hurt margins Source: CNA, CNBC.
• Cost structure: CEO Oliver Blume told staff that VW’s costs are 20% higher than comparable businesses, necessitating deeper cuts Source: CNBC.

Job cuts and restructuring

Volkswagen confirmed it aims to eliminate up to 100,000 positions globally, double the number previously agreed with unions. Most cuts will target administrative roles Source: The Guardian. The supervisory board rejected plans to shut four German factories, preserving plants in Hanover, Zwickau, Emden, and Neckarsulm for now . The carmaker also plans to reduce its model lineup by up to half and sell non-core assets .