The Volkswagen empire no longer bears the look of the confident champion of the 2010s. Profits are sliding, sales are under pressure, and aggressive competition from China is tightening the screws: the German behemoth is stalling. In a bid to reboot the business, the group is preparing a radical transformation — industrial and social — on a global scale. At stake is a plan that could affect as many as 100,000 jobs, resulting in a Volkswagen that is profoundly reshaped.
The urgency in the voice of Arno Antlitz, the group’s chief financial officer, is unmistakable. “Market changes are deep and lasting,” he declares. “We have no time to waste,” summarizes Antlitz, cited by Bloomberg. Behind the rhetoric, profitability is slipping away: the operating margin for 2026 is not expected to exceed a meager 1%. The question now is how the company arrived at this point, and how far its cure will go.
When Volkswagen’s margin falls to 1%, the alert is at its loudest
At the start of 2026, the group was still counting on an operating margin between 4% and 5.5%. Today, the forecast has slipped to a scant 1% after a sharp earnings warning. Volkswagen booked roughly €10 billion in non-recurring charges in 2026. About €6 billion pertains to Porsche, and nearly €2 billion to early retirements or asset relocations such as Osnabrück. Excluding these items, the 2026 margin would be around 4%. Management argues that even 4% is too weak to finance the group’s electrification and software transformation.
Meanwhile, current results are sliding markedly. In the first quarter of 2026, net income fell 28% to €1.56 billion. Revenue slipped by roughly 2% to 2.5%, to about €75.7 billion. A set of headwinds converges to drag the group down: roughly one-fifth of its volumes are being lost in China, its long-time first market. New U.S. tariffs on electric vehicles are expected to cost almost €4 billion a year. Labor costs and energy remain elevated in Germany, while European plants run at overcapacity. At the same time, electric-vehicle sales are rising, but these models remain less profitable than the internal-combustion models they are replacing. This mix ends up compressing a margin that had already been halved between 2021 and 2025. The leadership has little choice but to trigger the most brutal overhaul the company has seen in decades.
The Volkswagen 100,000-jobs plan: plants, sites and brands under siege
Faced with this financial calculus, Volkswagen is preparing a historic labor program. In total, around 100,000 jobs could disappear by 2030. That would represent roughly 15% to 16% of the group’s global workforce. About half of these cuts, roughly 50,000 positions, have already been agreed since 2024, chiefly in Germany. Of this total, about 35,000 cuts concern the Volkswagen brand alone in Germany. Management is counting on early retirements and not replacing certain roles.
Four German sites lie at the heart of the upheaval: Hanover, Emden, Zwickau, and the Audi plant in Neckarsulm. They have no new models scheduled after the current generation, with the plan reportedly to let these lines wind down gradually or reallocate them to other activities. The Audi plant in Brussels shut its doors last year. Osnabrück is slated to become a competence center for security and defense solutions. On the social front, the IG Metall union has grown tougher. Partnership chair Daniela Cavallo warns that a “grave conflict” looms if closures and job cuts proceed. Within Porsche, concerns are mounting about the future. An initial plan already calls for 8,900 job losses. Porsche CEO Michael Leiters has denied further layoffs; that denial is echoed in an internal note obtained by Reuters: “There is no plan to cut 4,000 more jobs at Porsche.” Beyond Porsche, the fate of several less-prioritized brands is also on the table. A phased extinction of SEAT is being discussed, while Ducati is frequently mentioned among assets that could be sold, and Bugatti has already departed the Volkswagen orbit.
Future Plan 2030: how Volkswagen aims to reinvent itself by simplifying
To escape this stalemate, the leadership unveiled the Future Plan 2030. This program is designed to restore the group’s operating margin on a sustainable basis. The target is an operating margin of about 9% by 2030. That level would translate into an operating profit of roughly €31 billion, against overhead costs (or “structural costs”) limited to about €37 billion. The plan envisions a roughly 20% reduction in these overhead costs. To reach this, Volkswagen is aiming for an average production of 9 million vehicles per year. Pre-pandemic, capacity hovered around 12 million, and it has remained near 10 million in recent times. The central lever is the simplification of the portfolio. The model lineup should be pared down by half, concentrating volumes on fewer platforms. The number of variants and options should be slashed by as much as 75%. As an example, the company cites reducing 2,300 seating configurations to around a hundred.
For customers, the strategy translates into a simpler, less cluttered lineup. Each model would generate more volume, with production timelines more predictable. Some flagship models will exit the catalog, such as the large Touareg SUV. At the same time, the electric lineup will be expanded with new models like the ID. Polo. Yet these EVs remain less profitable than their internal-combustion counterparts, complicating the overall equation. The group also wants to rebrand itself as a technology leader in the automotive space, leaning more on software and connected services to boost revenue. After-sales, used-vehicle operations, fleet contracts, and insurance are among the areas targeted by this plan. But with sweeping job cuts and threatened plants, the bet is risky. The rise of Chinese rivals like BYD adds further pressure on margins. In the midst of this storm, Volkswagen must keep its teams engaged while convincing drivers to embrace this new direction.
