Volkswagen considers closing up to four factories in Germany as profits plummet

Volkswagen Group is considering what was previously unthinkable: closing up to four factories in Germany and instituting layoffs that would shrink the workforce by 15%. 2025 was a bad year for Europe’s largest automaker. Its sales were essentially flat, but profits dropped 44% to just 6.9 billion euros ($7.9 billion) as operating margins more than halved. In March, the company announced it would cut 50,000 jobs in Germany by 2030 as part of a plan to adapt. Now, according to a report in Manager Magazin, those job losses may double.

The automaker did well selling EVs in Europe last year, but sales in North America and China fell and continue to fall, and tariffs have had a significant effect. In April, VW Group CFO and COO Arno Arnitz told investors that the company’s operating margin was “far too low” and that it would have to fundamentally transform its business model to cut costs and increase efficiency without tanking quality. That would require “significantly reducing complexity—in our product portfolio and technology platforms, as well as in the number of entities and decision-making layers,” Arnitz said.