Wolfsburg, Germany: German auto giant Volkswagen said Tuesday it plans to cut around 50,000 jobs in Germany by 2030 after reporting its lowest profits in nearly a decade.

In a letter to shareholders published in the company’s annual report, CEO Oliver Blume said the reductions would be spread across the group’s operations in Germany.

"In total, around 50,000 jobs are due to be cut by 2030 across the Volkswagen Group in Germany," Blume said.

The company had already agreed with labour unions in late 2024 to eliminate 35,000 positions by 2030, primarily at the core Volkswagen brand, as part of efforts to save about 15 billion euros annually. The new plan adds further reductions at premium brands Audi and Porsche, as well as the group’s software unit Cariad.

Europe’s largest automaker has been grappling with multiple challenges, including weak demand in Europe, the high cost of transitioning to electric vehicles despite uneven consumer uptake, and falling sales in China.

Once the dominant foreign automaker in China, Volkswagen has been losing ground to domestic competitors such as BYD and Geely. The company also cited tariffs imposed last year by Donald Trump on non-US carmakers as an additional strain on its business.

Volkswagen reported that earnings after tax dropped about 44 per cent last year to 6.9 billion euros (about $8 billion). The figure marks the company’s weakest performance since 2016, when it faced heavy financial penalties and recall costs following its diesel emissions cheating scandal.

Chief financial officer Arno Antlitz said further cost reductions would be necessary to improve the company’s competitiveness.

"We can only realise this if we continue to rigorously reduce costs," he said. "That is what we will focus on in the coming months."

For 2026, Volkswagen expects its core profit margin to range between 4 per cent and 5.5 per cent, potentially lower than the 4.6 per cent recorded this year after adjustments for restructuring expenses and costs linked to Porsche’s renewed focus on petrol-powered vehicles.

The group had previously warned of a 5.1-billion-euro financial hit after Porsche lowered its medium-term profit outlook and decided to continue selling petrol vehicles longer than planned due to weaker-than-expected demand for electric cars.

Volkswagen added that its outlook assumes US tariffs will remain in place and cautioned that “uncertainties regarding restrictions in international trade and geopolitical tensions” as well as “volatile” commodity and energy markets could pose further challenges.