Volkswagen to Cut Global Production Capacity by 3 Million Units, Slash 19,000 Jobs in Germany This Year
Recently, according to foreign media reports, Volkswagen CEO Oliver Blume will announce at this month’s annual general meeting that the company is proceeding with its restructuring plan in Germany as scheduled, reducing 19,000 jobs by the end of 2026 and setting a mandatory target of cutting more than 28,000 positions cumulatively by 2030.
In his speech prepared for the general meeting, Blume indicated that as of 2025, production costs at Volkswagen’s German plants have been reduced by more than 20%. This adjustment aims to align with current market demand and improve operational efficiency.
Financial data shows that Volkswagen Group is under significant performance pressure. In the first quarter of 2026, the group’s global deliveries were 2.05 million vehicles, a year-on-year decrease of 4%. For the full year of 2025, deliveries totaled 8.9839 million vehicles, with notable sales declines in both the Chinese and North American markets.
In the Chinese market, annual sales fell by 8% year-on-year to 2.6938 million vehicles. Intensified competition from local brands was the main contributing factor in China. Meanwhile, sales in the North American market were impacted by tariff policies.
In April this year, Volkswagen Group announced a reduction in its global annual production capacity plan from 12 million vehicles to 9 million vehicles, a cut of 3 million units. To improve profitability, Volkswagen has set an operating profit margin target of 4% to 5.5% for the 2026 fiscal year, a significant increase from the 2.8% recorded in the 2025 fiscal year.
Oliver Blume previously stated that Volkswagen faces excessively high energy costs and cumbersome regulations in Germany, particularly regarding labor costs, and therefore must offset these disadvantages by enhancing production efficiency.
