Volkswagen Group May Continue Job Cuts: Press Office Hints at Impact of U.S. Tariffs

In September 2024, Volkswagen AG announced sweeping cost-cutting measures, including plans to close several plants in Germany and implement large-scale layoffs. After tense negotiations with labor unions, the company reached an agreement in December known as “Zukunft Volkswagen” (“Future Volkswagen”), which called for reducing the workforce by 35,000 employees by 2030 and cutting annual vehicle production in Germany to 734,000 units.

Last year, Volkswagen reported that roughly 20,000 positions had already been eliminated. More recently, it became known that two German plants — in Dresden and Zwickau — would be shut down. According to company estimates, these tough measures are expected to generate mid-term savings of approximately €15 billion per year (about $16 billion at current exchange rates).

However, that may not be enough. The automaker is now reportedly considering additional steps to reduce costs by a further 20%.

German business publication Manager Magazin, citing internal sources at Volkswagen, reports that the additional cuts are planned to be implemented by the end of 2028. A new savings plan was reportedly presented in January during a closed-door meeting led personally by CEO Oliver Blume. While the details have not been made public, the strategy is believed to include further plant closures and workforce reductions. The company is expected to outline the plan in March during a press conference covering its annual financial results.

Seeking clarification, Reuters contacted Volkswagen’s press office but did not receive a direct response. A company spokesperson declined to comment on the reported new strategy — neither confirming nor denying it — but noted that previous measures had already saved “tens of billions of euros,” helping to offset the impact of new U.S. tariffs.

At the same time, Volkswagen is facing additional pressure beyond U.S. trade policy, including cooling demand in China and slower-than-expected growth in electric vehicle sales. Against that backdrop, further austerity measures may prove difficult to avoid.