50,000 jobs are to be lost at the Volkswagen Group in Germany. A dramatic number, but one that doesn’t come entirely out of nowhere. The largest car manufacturer in the Federal Republic has been restructuring for years. How did the company get to the point of having to make such tough cuts? What happened so far.
The first job cuts at VW
For the first time in 2006, the group made the decision to cut 20,000 jobs. The reason for this was the losses at the time in the six West German plants. Interestingly, the group recorded the best sales growth in its history in the same year. But production in the factories in question was only at 60 percent capacity.
Ten years later there was a hard turning point in the company’s history: the diesel scandal. Due to the consequences, jobs had to be cut again in the Volkswagen Group in 2016. At that time, the plan was to cut 30,000 jobs by 2025 – 23,000 of them at German locations. But as part of the VW restructuring, not only are job cuts planned, but also around 9,000 new jobs are to be created in future fields such as digitalization, software development and battery and electromobility skills. HR managers know that job cuts can be carried out in different ways.
Socially acceptable job cuts: But how?
At VW, the workforce reductions are being carried out in a socially acceptable manner. Employees are offered partial retirement or termination agreements with high severance payments. According to information from WirtschaftsWoche, the severance payments are in a range of 17,700 euros, in the collective agreement range for at least five years of service and 404,700 euros for everyone who has been employed at Volkswagen for at least 20 years. The amount of the severance pay depends on the respective classification into collective bargaining groups.
There is also a turbo bonus of 50,000 euros for employees who have been working for the group for over five years and come forward within two weeks to accept the severance offer. Redundancies for operational reasons were excluded. In addition, the positions should be reduced by no longer filling vacant positions.
But that didn’t seem to be enough to reduce personnel costs and get the company back on the road to success. That’s why the next job cuts program followed in 2023. In VW’s words this was called the “performance program”. The performance program started in 2023 and envisaged a 20 percent reduction in administrative personnel costs. This served the goal of achieving a return of 6.5 percent by 2026.
In general, the restructuring at Volkswagen is due to a mixture of poor economic results and the need to create new job profiles due to changing market conditions and technology. This also applies again a year later, namely 2024.
The latest job cuts at VW
After long negotiations, Volkswagen agreed on a further plan for job cuts with the works council and the IG Metall union. Officially, this was referred to as an “agreement in principle on competitiveness”. Gunnar Kilian, then board member and responsible for human resources, announced at the time that Volkswagen would use the plan to position itself competitively for the future. “With the ‘Future Volkswagen’ agreement, Volkswagen AG, together with the employees, has agreed on a target that combines job security, economic stability and technological leadership in the area of sustainable mobility,” he wrote on LinkedIn.
This should be achieved, among other things, through financial labor cost relief of 1.5 billion euros per year by 2030. Kilian predicted medium-term cost effects of over 4 billion euros per year. But how exactly did Volkswagen want to reduce costs?
The agreement in principle provided for a further socially acceptable reduction of more than 35,000 jobs at German locations by 2030. The dismantling should be carried out again using the same means as in 2016. In the period that followed, quite a few VW employees accepted the offer or retired due to demographic change. As Handelsblatt, among others, reported at the time, 20,000 contractually fixed departures had already been agreed upon in the summer of 2025, meaning the group had already achieved over half of this goal.
Nevertheless, the group feels compelled to further sharpen its skills and cut additional jobs. By 2030, not only 35,000 jobs will be lost, but 50,000.
Concern about Volkswagen location closures
Despite enormous job cuts, site closures were out of the question for a long time. That could change now. Even if the VW works council seems to be doing everything to ensure that this does not become a reality. “Location closures and operational dismissals are excluded,” works council leader Daniela Cavallo told Die Welt last week. Two car models that are built at the Osnabrück site are to be phased out in the future. It seems questionable whether the work will still be needed. VW wants to decide on the Osnabrück location by the end of this year.
So far, the defense company Rheinmetall has expressed interest in the site. Rheinmetall plans to have bulletproof driver’s cabs for military trucks manufactured there, according to Automobilwoche. The plant has around 2,300 employees who are still waiting for a decision about their future.
The main reasons for the cuts in the parent company are increasing cost pressure, the transformation to electromobility and fluctuating demand in important markets. “We want to keep our combustion vehicles technologically competitive in this challenging environment, continue to invest in exciting electric vehicles and the latest software solutions for our customers and expand our regional presence, especially in the USA,” says Arno Antlitz, CFO and COO of the Volkswagen Group. This is only possible if costs continue to be consistently reduced.
VW premium brands Audi and Porsche are on the decline
In 2025, Volkswagen recorded its biggest drop in profits since the diesel scandal crisis. Profit fell by almost half compared to the previous year. The situation with the group’s premium brands is sometimes even more serious.
At Porsche in particular, the drop in earnings was drastic. Group sales fell by 9.5 percent to 36.27 billion euros in 2025. The operating result fell by 92.7 percent to 413 million euros. The main reasons were extraordinary expenses of around 3.9 billion euros, for example for the realignment of the product strategy, battery activities and US tariffs. As a result, the operating return on sales fell from 14.1 to 1.1 percent.
Based on this economic development, Porsche intends to further reduce jobs. According to the company, Porsche will become “leaner and faster”. Michael Leiters, the company’s new boss since the beginning of 2026, announced at the annual press conference that the management structure would be slimmed down and hierarchies would be reduced. A specific schedule or figures as to how many additional jobs will be eliminated are not yet known. In a previous savings program, it was decided that 3,900 jobs at Porsche would be cut by 2029. In the Stuttgart region, around 1,900 jobs are to be cut in a socially acceptable manner. In addition, the contracts of around 2,000 temporary employees have already expired. There is now more to come.
Sales figures are also declining at Audi: Sales were 2.9 percent below the previous year and even more than 14 percent below the record year of 2023. Industry observers therefore expect that the coming balance sheet will again be described as “challenging”. At the beginning of last year, the car manufacturer Audi announced that it would cut a total of 7,500 jobs in Germany by the end of 2029. From these and other financial cuts on the part of employees, the company expects to save more than one billion euros per year in the medium term, as it announced to the Tagesschau.
Uncertainty among VW employees
The transformation means additional uncertainty for employees: major job cuts on the one hand are contrasted with drastic further development of the company on the other. The latter is demonstrated by massive investments in electrification, software and new business models – measures that cause costs in the short term but are intended to ensure competitiveness in the long term.
Tonia Schöler is a volunteer at Human Resources.
