The auto giant’s profits fell by almost half in 2025
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The
EU’s largest automaker, Volkswagen (VW), has announced that it will cut
about 50,000 jobs in Germany, citing plunging profits, soaring energy
costs and mounting trade pressures.
In its annual report on
Tuesday, VW said that net income nearly halved in 2025, falling to €6.9
billion (over $8 billion), its weakest result since the 2016 diesel
scandal, while revenues slipped to just under €322 billion.
VW will “systematically reduce our costs”
in the coming years, executives said, confirming that tens of thousands
of positions will be slashed across the group’s German operations by
2030 on top of previously announced headcount reductions. In 2024, the
company reached a deal with unions to avoid involuntary redundancies and
plant closures at production sites in Germany.
“The year 2025 was characterized by geopolitical tensions, tariffs, and intense competition,”
VW’s chief financial officer Arno Antlitz said, adding that 50,000 jobs
would be cut by 2030 and that further cost-cutting measures could
follow in order to make the automaker more competitive.
Germany’s
automotive sector has been struggling amid surging energy prices,
sluggish demand in Europe, rising competition from Chinese
manufacturers, US tariffs, and a slower than expected transition to
electric vehicles. Following the escalation of the Ukraine conflict in
2022, the EU drastically reduced imports of Russian oil and gas, forcing
member states to switch to more expensive alternatives. The resulting
energy crisis has fueled concerns about the health of the bloc’s largest
manufacturing economy and the risk of a further downturn.
Energy markets have faced renewed volatility in recent days following
the US-Israeli bombing of Iran and the disruptions to global shipping
through the Strait of Hormuz, a key artery for global oil and LNG
supplies. Traffic through the straight has reportedly dropped by 80%
over the past week. Crude oil and European wholesale gas prices have
moved sharply higher, adding further pressure on energy-intensive
industries and sparking concerns about the bloc’s energy security.
The
situation has prompted some EU politicians to step up calls to
reconsider Russia sanctions after President Vladimir Putin warned that
Moscow could halt gas supplies ahead of a Brussels’ planned 2027 ban.
The
European Commission is reportedly discussing possible emergency
measures to shield manufacturers from surging electricity costs,
including a review of national energy taxes, grid charges and
carbon-pricing mechanisms.