Volkswagen AG targets major workforce reduction by 2030

Volkswagen AG is on track to reduce its workforce by 50,000 employees by 2030, CEO Oliver Blume announced on Thursday at the German automaker's annual shareholders' meeting, according to DPA.

Blume told shareholders that Volkswagen's situation is "strained and challenging," and that conditions in the automotive industry have deteriorated further in 2026, CE Report quotes AGERPRES.

"Our business model, which was successful for decades, no longer works today. We need to transform it," said the head of Europe's largest carmaker.

He outlined the key elements of Volkswagen's new strategy through 2030. The company's goal is to become "the world's most attractive automaker" by the end of the decade, with an operating margin of between 8% and 10%. New models, such as the electric ID. Polo, demonstrate that the brand is on the right track and "once again ahead of the competition," Blume said.

However, he added: "We are still not making enough money from these models."

At Volkswagen's core VW brand alone, 35,000 jobs will be eliminated by 2030. By the end of this year, the company will already have 19,000 fewer employees, with 28,000 voluntary departures having been agreed, according to Blume.

Manufacturing costs at Volkswagen's German plants fell by more than 20% in 2025. Blume reaffirmed his intention to further reduce factory capacity. By 2030, he aims to cut European production capacity by another 500,000 vehicles, in addition to the one million-unit reduction already agreed through 2028. A similar reduction will take place in China, bringing the total global capacity cut to an additional one million vehicles by 2030.

On Tuesday, Volkswagen AG said it expects weakness in the Chinese auto market to continue through the remainder of the year and does not anticipate a recovery significant enough to offset the losses it has recorded there.

The German group described China, the world's largest automotive market, as being under increasing pressure.

Without providing additional details, Volkswagen stated that it expects the global new vehicle market to fall below 21 million units and will adjust its plans accordingly.

Volkswagen's comments followed data released by the China Passenger Car Association (CPCA), which showed that vehicle sales declined 19.5% year-over-year during the first five months of 2026. The decline was driven by reduced subsidies, higher fuel prices, and an ongoing price war, while manufacturers faced weakening consumer confidence and softer overall demand.

Despite the difficult economic environment, Volkswagen's battery-electric vehicle sales continue to grow significantly.

The German automaker said that strategic adjustments and the launch of new electric and plug-in hybrid models have positioned the company well to withstand market turbulence.

In March, Czech automaker Skoda, which is owned by Volkswagen AG, announced that it would withdraw from China by the middle of next year after failing to keep pace with the region's rapid shift toward electric vehicles.

After years as Skoda's largest market, with annual deliveries exceeding 300,000 units between 2016 and 2018, sales in China fell to just 15,000 vehicles last year as foreign automakers faced fierce competition from domestic brands.

"The company will continue selling Skoda models in the Chinese market in cooperation with regional partners until the middle of next year," the automaker said in a statement.

As part of its strategic repositioning, Skoda plans to focus on strengthening its brand in Southeast Asia, where sales growth was recorded in 2025.

Volkswagen has faced several difficult years in China, where local brands such as BYD and Geely have overtaken the German group, ending years of dominance by foreign automakers that have struggled to keep up in an EV-driven market.

In China, a key market for Volkswagen, sales fell approximately 8% last year to 2.69 million vehicles amid intensifying competition from domestic manufacturers. Sales in North America also declined 10.4% due to tariffs imposed by President Donald Trump.

By contrast, Volkswagen AG reported a 3.8% increase in European sales to 3.38 million vehicles. In South America, growth was even stronger, rising 11.6% to 663,000 units.

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