A target of 19,000 fewer German workers by the close of 2026 is part of the restructuring plan Volkswagen AG is executing, according to remarks delivered by CEO Oliver Blume to shareholders at the June 18 annual general meeting.
CEO Oliver Blume told shareholders more than 28,000 binding departure agreements have already been reached for 2030
Bloomberg / Getty Images
A target of 19,000 fewer German workers by the close of 2026 is part of the restructuring plan Volkswagen AG is executing, according to remarks delivered by CEO Oliver Blume to shareholders at the June 18 annual general meeting.
The cuts apply to Volkswagen AG, including its Sachsen and Osnabrück plants. Across Volkswagen, Audi, Porsche, and software subsidiary CARIAD, signed departure agreements now cover more than 28,000 employees through 2030 — a milestone within the group's wider goal of shedding roughly 50,000 positions at its German facilities by that year.
The automaker said it cut factory costs at Volkswagen's German sites by more than 20 percent in 2025. Through collective bargaining agreements and headcount reductions, the company said it has achieved sustainable cost savings of around 1 billion euros across the group to date, working toward annual net savings of 6 billion euros by 2030.
Blume said the job reductions are driven by the need to bring production capacity in line with current demand. Volkswagen had built a global production network based on an annual capacity of 12 million vehicles, a figure set before the COVID pandemic on more optimistic assumptions. The company now considers roughly 9 million vehicles — its average over the past five years — a realistic target, and said it has already removed some 2 million units of capacity from its European and Chinese production network over the past two years.
The company posted an operating result of approximately 8.9 billion euros in 2025, with a margin of 2.8 percent, weighed down by nearly 9 billion euros in one-off special effects and U.S. tariff costs. Volkswagen delivered roughly 9 million vehicles worldwide that year, with sales revenue of around 322 billion euros.
Looking ahead, Blume said Volkswagen expects an operating return on sales of between 4 and 5.5 percent for 2026 and net cash flow in the automotive division of between 3 and 6 billion euros. The company's long-term ambition is an operating return on sales of 8 to 10 percent by 2030.
Tariffs continue to weigh on the business, Blume said, with a negative effect of around 5 billion euros per year through direct and indirect impacts, particularly on exports from Europe and products from Mexico.
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