Volkswagen Plans to Cut 50,000 Jobs and Reduce Annual Production Capacity by One Million Units

[Corporate Strategy] Volkswagen plans to cut 50,000 jobs by 2030 and further reduce its annual production capacity by up to one million vehicles.

Core Development: Plummeting Profits Force Deep Contraction

Operating profit for fiscal year 2025 amounted to just €8.868 billion, a year-on-year plunge of 53.5%, marking the lowest level since 2016. CEO Oliver Blume stated that the new round of layoffs will primarily affect Audi, Porsche, and Cariad.

Key Metrics: Severe Underutilization of Production Capacity

Average factory capacity utilization in Europe stands at only 55%, far below the 75% breakeven threshold, with some plants—such as Osnabrück—as low as 30%. The group aims to shrink its global production capacity from over 12 million units to 9 million units.

Strategic Rationale: Escaping Diseconomies of Scale

Although sales volume remained stable at 9.022 million vehicles in 2025 and revenue dipped only slightly by 0.8%, revenue from the premium segment declined by 11.7%, compelling Volkswagen to implement structural adjustments to restore profitability and operational efficiency.