Volkswagen CFO addresses plant closures, job losses as profits sink
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 scrapped hope for sales revenue growth in 2026, as the German auto giant lays the groundwork for a radical overhaul of the business.
Europe’s biggest carmaker posted an operating profit of 3.5 billion euros ($3.98 billion) for the April to June period, down nearly 10% from a year ago and missing expectations of 4.3 billion euros, according to an LSEG-compiled consensus.
The company also flagged it expects sales revenue in 2026 to see a decline of up to 3% this year, versus a previous forecast of sales revenue growth of up to 3%.
The results come shortly after the company confirmed it is looking to cut up to 100,000 jobs, twice as many as previously stated, as it seeks to counter a profit slump amid billions of euros in tariff costs and intensifying competition from Chinese car brands.
In a widely reported memo to staff earlier this month, CEO Oliver Blume said that the group’s costs were 20% higher than comparable businesses and the company would therefore need to reduce costs even further.
Volkswagen’s CEO reportedly said the company had been unable to confirm alternative uses for four German factories previously threatened with closure. These refer to Volkswagen’s plants in Hanover, Zwickau, Emden, and the group’s Audi facility in Neckarsulm.
The automaker had agreed a deal with unions in late 2024 to avoid factory closures in Germany and rule out compulsory redundancies until the end of 2030.
Shares of Volkswagen slipped 3% on Friday morning. The stock is down nearly 30% year-to-date.
‘We have to do a second step of restructuring’
Volkswagen Chief Financial Officer Arno Antlitz said the auto industry has faced substantial challenges over the past 12 months, citing the heavy burden of tariff costs, the rapid growth of China’s domestic premium car market and the rapidly growing number of car exports from Beijing to Europe.
“This leads to this weight on our margin, a margin of roughly 4% is clearly a wake-up call that we have to do a second step of restructuring,” Antlitz told CNBC’s Annette Weisbach on Friday.
Asked whether the company may look to outsource plant capacity to the defense industry to stave off closures, Antlitz replied: “There are various options. And look, I’m not looking for job cuts per se and I’m not looking for plant closures per se.”
He continued: “We want to reduce our cost structure and we want to increase productivity and increase the capacity utilization of our plants. And if there are better options then we will obviously look into that.”
Antlitz said it is “much better” for the company to find an alternative solution to plant closures.
Shares of Volkswagen year-to-date.
‘An unprecedented risk scenario’
Volkswagen said in April that it would end production of the ID.4 electric sports utility vehicle out of its Tennessee plant amid a challenging U.S. environment for EVs.
Volkswagen’s Blume said Friday that the company had managed to offset “continued unavoidable headwinds” in the double-digit billions.
“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.
