Volkswagen Group and Porsche report historic profit decline: 50,000 job cuts planned

The Volkswagen Group's operating profit in 2025 fell by more than half, reaching a level of 8.9 billion euros. The German automotive conglomerate struggled last year with strong competition in the Chinese market and the negative impact of tariffs and geopolitical tensions. Despite the drastic drop in operating profitability, the company managed to record a financial profit of 432 million euros. This situation reflects the deep crisis in which the European automotive industry finds itself in the face of global trade and technological changes. The Volkswagen Group, one of the world's largest car manufacturers, has based its growth for decades on dominance in the Chinese market. However, the growing power of local electric vehicle producers and price wars have significantly weakened the position of Western brands in this region. Historically, the conglomerate has rarely opted for such radical restructuring steps as are currently planned in response to the collapse in results.

Particularly severe was the collapse recorded by the Porsche brand, whose operating profit fell to 410 million euros while revenues decreased by 9.5%. Some data points to an even deeper regression, suggesting a drop in operating profit to just 90 million euros, which would mean a 98% reduction year-on-year. The operating margin of the luxury car manufacturer shrank to 0.3%, while in the previous period it was 14.5%. CEO Oliver Blume indicated that demand for premium brands, including Audi and Porsche, is also threatened in the Middle East due to ongoing armed conflicts there. 0,3 (%) — Porsche's operating margin after drastic decline Porsche profitability 2024 vs 2025: Operating margin: 14.5% → 0.3%; Revenue: 100% → 90.5%

In response to deteriorating financial results, CEO Oliver Blume announced a wide-ranging reduction in employment. By 2030, the conglomerate plans to eliminate 50,000 jobs, which is intended to help regain profitability and adapt the company's structure to new market realities. The company also intends to place greater emphasis on drastic cost cuts and further development of combustion engines alongside electric powertrains to regain sales momentum. This strategy is a direct response to aggressive tariff policies and difficulties in maintaining margins in the luxury and premium car segments. „Porsche aims to regain speed with cost cuts and combustion engines” — Oliver Blume via Reuters Volkswagen Group financial results 2025: Operating profit: 8.9, Financial profit: 0.432