In 2025, "Volkswagen"'s profit fell sharply - almost by half. The company plans to cut about 50,000 jobs in Germany by 2030. What problems is the largest automobile concern in Europe struggling with?
2025 was not a good year for the German concern "Volkswagen" (VW): its profit fell by 44 percent after taxes - from 12.4 billion euros in 2024 to 6.9 billion euros in 2025, the largest automaker in Europe announced. The dividend will be 5.26 euros per preferred share, which is 17% less than the previous year, the public broadcaster ARD reported.
Operating profit also halved to around 8.9 billion euros. Turnover remained unchanged at 322 billion euros. Chief Financial Officer Arnaud Antlitz said the year had been marked by geopolitical tensions, tariffs and strong competition. The company's restructuring is showing progress and net cash flow is better than expected.
Job cuts and lower salaries for managers
"Volkswagen" will continue to reduce costs, including through job cuts. "A total of around 50,000 jobs will be cut in Germany by 2030 – across the entire VW Group," Oliver Blume of the board of directors announced in a letter to shareholders. At the end of 2024, management had already agreed with the unions to cut 35,000 jobs by 2030, mainly in the core brand "Volkswagen".
The cost-cutting measures are even affecting the CEO: Blume's total compensation, including social security costs, fell last year to 7.42 million euros - from 10.35 million euros a year earlier.
All members of the board of directors have agreed to lower salaries in connection with the savings program amounting to billions of euros. For Blume, this means around half a million euros less income. This is largely due to lower bonuses paid last year, ARD said.
Problems in the US and China are putting pressure
In 2025, sales fell by 0.5 percent - to just under nine million vehicles across all brands of the concern. In Europe, there is a slight increase in sales, which, however, cannot compensate for the decline in China and North America.
For the important American market, the biggest burden is the customs policy of US President Donald Trump. Added to this are the more difficult conditions for electric vehicles: Trump changed, among other things, emissions rules and eliminated subsidies for electric vehicles, as a result of which the American car giants had to write off tens of billions.
That is why the planned new plant for electric pickup trucks of the Scout brand of the "Volkswagen" concern is facing problems.
A crisis year for "Porsche"
The concern is particularly affected by the problems of "Porsche", which is suffering from the collapse of sales in China, increased tariffs in the USA and a miscalculation of the pace of the transition to electromobility. Since sports car fans are attached to internal combustion engines, "Porsche" is once again focusing more strongly on models with conventional, climate-damaging engines.
As announced by the parent company VW, "Porsche"'s operating result for 2025 amounted to 90 million euros, after it was 5.3 billion euros in the previous year. Together with financial services, the Stuttgart company generated 413 million euros – with a profit of 5.6 billion euros in 2024.
According to forecasts, operating profit should have been around half a billion euros, including financial services.
The concern expects sales to continue to decline in 2026. However, profitability should recover to over 5%, ARD points out.
2026 should be better for VW
This year, operating profit before interest and taxes is expected to recover to 4.0-5.5%. Deutsche Bank analyst Tim Rokoss sees opportunities for Volkswagen, especially in the recently underdeveloped business in China. The construction of a "second Wolfsburg" there - under the "in China for China" strategy - is the only promising path, he believes.
Through local supply chains, "Volkswagen" can gain an important cost advantage over its Western competitors.
According to Rokosza, quoted by ARD, investors currently assess "Volkswagen"s strategy for China neutrally - or even negatively. Therefore, its success could boost the share price, the ARD publication also says.