Volkswagen Group plans to cut 50,000 jobs in Germany by 2030 after reporting a sharp drop in profits amid rising costs and US tariffs.

The German carmaker reported that FY25 earnings after tax fell 44.3% year-on-year to €6.90bn ($8.04bn), a result that multiple reports described as its weakest performance in nearly a decade.

The downturn in profit comes as the company faces trade tensions, difficulties in the Chinese market and the impact of strategic changes at its sports car brand, Porsche.

In a letter to shareholders, Volkswagen CEO Oliver Blume said: “In total, around 50,000 jobs are due to be cut by 2030 across the Volkswagen Group in Germany.”

Volkswagen had previously reached an agreement with unions at the end of 2024 to reduce 35,000 jobs by 2030.

At that time, the company said it was adjusting production capacity at its German plants and establishing conditions to cut labour costs by €1.5bn annually through a collectively agreed wage settlement running until 2030.

The group said its cost-cutting initiatives are progressing in line with expectations.

Through collective bargaining agreements and workforce reductions, Volkswagen reported cost savings of around €1bn in the 2025 financial year as planned.

It added that the company remains on track to achieve its target of generating net annual cost savings of more than €6bn across the group by 2030.

On China, the company said it has shortened development timelines by as much as 30% while building a “very competitive cost base”.

According to its annual report, Volkswagen ended 2025 with approximately 662,900 employees worldwide, representing a decline of about 2.4% compared with 2024.

Despite the restructuring programme, the carmaker said it will continue expanding its product lineup.

Alongside the workforce reduction plans, Volkswagen stated that it intends to launch more than 20 new models globally in 2026.