Volkswagen’s net profit plunged 32.9% to €1.54 billion in the second quarter of 2026 as falling sales in China, US tariffs and lower-margin vehicles increased pressure on Europe’s largest carmaker. Management is now considering up to 50,000 additional job reductions and reviewing the future of four German factories.
Those possible cuts would come on top of approximately 50,000 departures already covered by existing programmes. Volkswagen has not approved 100,000 immediate or compulsory layoffs, but that figure represents the potential combined scale of its restructuring.
Volkswagen’s latest results
- Second-quarter net profit: €1.54 billion, down 32.9%
- Second-quarter revenue: About €82.4 billion, up approximately 2%
- Second-quarter operating profit: €3.47 billion, down 9.5%
- First-half revenue: €158.1 billion, broadly unchanged
- First-half operating profit: €5.9 billion, down 11.6%
- First-half operating margin: 3.8%
- First-half vehicle sales: Four million, down 8.4%
The latest decline follows another difficult comparison: Volkswagen’s second-quarter profit in 2025 had already fallen by almost 37% from 2024.
The company’s official first-half financial results cover operations across brands including Volkswagen, Audi, Porsche, Škoda, SEAT, Cupra, Bentley and Lamborghini.
Why did Volkswagen’s profit fall?
Volkswagen recorded a €500 million charge after stopping US production of the electric ID.4. American tariffs reportedly reduced quarterly profit by approximately €1.3 billion, while an unfavourable sales mix meant the group sold a greater proportion of lower-margin vehicles.
Electric vehicles remain central to Volkswagen’s plans, but batteries, software and new production systems require heavy investment. Price competition limits how much of that cost can be passed to customers.
Finance chief Arno Antlitz said the 3.8% first-half operating margin was too low. Management wants to reduce vehicle costs, overhead expenses, development times, overlapping models and complicated decision-making.
Volkswagen is also simplifying its wider portfolio through moves such as the planned sale of a controlling stake in Everllence to Bain Capital.
Is Volkswagen cutting 100,000 jobs?
The 100,000 figure combines two phases rather than one confirmed layoff announcement.
The first covers approximately 50,000 previously agreed departures across the group. About 37,000 arrangements have reportedly been signed through voluntary redundancy and partial retirement.
CEO Oliver Blume has warned that another 50,000 positions worldwide could theoretically go if Volkswagen cannot find other savings. The group estimates that its overhead costs are about 20% higher than those of comparable companies, with personnel responsible for roughly half of that expense.
The final number will depend on negotiations and savings from fewer management layers, reduced labour costs, simpler vehicle platforms and better factory utilisation. Similar pressure to reduce organisational expenses is visible in the unrelated Diageo job cuts and restructuring plan.
Which Volkswagen factories are at risk?
- Emden: Volkswagen passenger-vehicle plant
- Hanover: Volkswagen Commercial Vehicles facility
- Zwickau: Electric-vehicle production plant
- Neckarsulm: Audi manufacturing facility
No closure has received final approval. Blume has said alternatives could include lower production, new products, partnerships or different industrial uses.
Volkswagen wants to reduce annual production capacity from a pre-pandemic level of approximately 12 million vehicles to nine million. Around two million units have already been removed, with another 500,000-unit reduction planned in China.
Why factory closures will be difficult
Employee representatives and the German state of Lower Saxony, which owns 20% of Volkswagen’s voting rights, together hold more than half of the supervisory board’s seats. Both have significant influence over major restructuring decisions.
A 2024 union agreement ruled out German factory closures and compulsory redundancies until 2030. It included 35,000 Volkswagen-brand job reductions in Germany through socially responsible measures by the end of the decade.
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China deepens Volkswagen’s problems
Volkswagen’s China deliveries fell 31.6% during the first half of 2026 after reaching their lowest annual level since 2011 in the previous year. Chinese manufacturers such as BYD, Geely and Chery are winning buyers with competitively priced electric and plug-in hybrid vehicles.
Those companies are also expanding in Europe, where Chinese brands approached an 11% market share in May, up from just under 3% three years earlier. Volkswagen is therefore losing volume in China while facing stronger competition at home.
Volkswagen cuts its 2026 outlook
Volkswagen now expects annual sales to be flat or decline by as much as 3%, replacing its previous forecast for growth of up to 3%. Worldwide vehicle deliveries are expected to fall between 3% and 7%.
The group retained an operating-margin forecast of 4% to 5.5%, meaning profitability must improve during the second half.
What it means for customers
The restructuring does not mean Volkswagen warranties, servicing or spare-parts support are ending. The US ID.4 production halt also does not confirm that the model has been discontinued worldwide.
Customers could eventually see fewer overlapping models and variants. However, Volkswagen’s European order book was approximately 12% higher than at the end of 2025, while European electric-vehicle orders rose by more than 50% in the second quarter.
The additional 50,000 potential cuts and four plant closures remain proposals. Their outcome will depend on supervisory-board decisions and negotiations with unions and employee representatives.
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