A German national flag on a barge near the Volkswagen AG factory in Wolfsburg, Germany, on Tuesday, March 10, 2026.
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Volkswagen reported weaker-than-expected second-quarter profits on Friday and withdrew its 2026 sales‑revenue growth forecast, signaling a major restructuring effort for the German automaker.
Europe’s biggest carmaker posted an operating profit of €3.5 billion ($3.98 billion) in the April‑to‑June period, a nearly 10 % year‑on‑year decline that missed the €4.3 billion consensus forecast.
Volkswagen now expects sales revenue in 2026 to decline by up to 3 % this year, reversing a prior outlook that had projected growth of the same magnitude.
The company has confirmed plans to cut up to 100,000 jobs—double the earlier target—as it confronts a profit slump amid rising tariff costs and intensifying competition from Chinese automakers.
In a memo to staff earlier this month, CEO Oliver Blume said the group’s costs were roughly 20 % higher than comparable peers, prompting the need for deeper cost reductions.
Blume also indicated that alternative uses for four German plants—Hanover, Zwickau, Emden and the Audi site in Neckarsulm—could not yet be secured, leaving those facilities vulnerable to possible closure.
A late‑2024 agreement with German trade unions is designed to prevent plant closures and prohibit compulsory layoffs through 2030.
‘An unprecedented risk scenario’
Blume said the company had managed to offset “continued unavoidable headwinds” amounting to double‑digit billions of euros.
“At the same time, the environment for the automotive industry remains extremely challenging: geopolitical crises, trade conflicts, high regulatory requirements, volatile markets and intensified competition,” Blume said in a statement.
“In an unprecedented risk scenario, Volkswagen Group enters the next phase of its transformation – from a position of strength and with a clear understanding of the opportunities ahead,” he added.
In April, Volkswagen announced it would cease production of the ID.4 electric sport utility vehicle at its Tennessee plant, citing a difficult U.S. electric‑vehicle market.
The stock has fallen around 30 % year‑to‑date, and traded 3.3 % lower in pre‑market trading.
