The German automaker Volkswagen (VW) is planning a new cost-cutting program that includes cutting costs by 20% by 2028, with plant closures not ruled out, Manager Magazin reported, citing company sources.
The reasons for this move are VW's weak sales in China, US tariffs and increased global competition. Therefore, previous cost-cutting measures are insufficient. Plant closures and further job cuts beyond the already announced 35,000 are not ruled out.
VW itself reacted cautiously to this information, pointing to cost-cutting programs that are already underway across all brands. A company spokesman said that these programs have already led to savings of tens of billions of euros. “This has allowed the company to mitigate the impact of geopolitical challenges, such as US tariffs, and to stick to the plan,” he said.
CEO Oliver Blume is expected to provide more details at a press conference on March 10. The works council was more emphatic. In a statement to employees, the council said the article was “rather a description of the status of long-term efficiency improvement programs.” Works council chairwoman Daniela Cavallo again spoke out clearly against plant closures.
At the end of 2024, after lengthy negotiations, the group and the union agreed on a restructuring program that includes 35,000 job cuts in Germany by 2030. In return, site closures and forced layoffs were ruled out. The workforce reduction is mainly carried out through partial retirement, early retirement and severance payments.
As reported by the Bild newspaper, in October 2025 VW had a deficit of 11 billion euros to finance planned investments for the following year. VW's net loss in the third quarter of 2025 amounted to 1.072 billion euros. In the first nine months of 2025, its profit fell by more than 60%, from 8.8 billion euros to 3.4 billion euros.
The German automotive industry is experiencing a severe crisis, partly due to the deterioration of trade relations between China and the European Union, as well as between the US and the EU.