Volkswagen profit drops 33% as group plans up to 100,000 job cuts

Volkswagen reported a 32.9% fall in second‑quarter net profit to €1.54 billion, citing a €500 million charge for stopping U.S. production of the ID. 4 electric SUV, lower‑margin product mix and intense competition from Chinese manufacturers. The group cut its 2026 sales‑revenue outlook to flat‑to‑‑3% growth and warned that up to 100 000 jobs could be cut worldwide, with four German plants at risk of closure.

The financial slump has sparked a broad cost‑reduction programme, including plant closures, model rationalisation and a target operating margin of 4‑5.5% for the year. While the Volkswagen brand sees deliveries fall 26% in China, its Skoda subsidiary posted record sales, delivering 555 700 vehicles in the first half, a 9.1% increase, and a 48% rise in electric‑vehicle deliveries. Skoda’s operating profit rose 6.3% to €1.37 billion, offsetting part of the group‑wide earnings decline.

Analysts note that the combined pressure of Chinese market competition, U.S. tariffs and weakened demand in Europe is driving the restructuring, and the group faces speculation about possible future Chinese ownership if competitiveness does not improve.