Volkswagen to Intensify Cost Cuts After Profit Forecast Slashed

Volkswagen will intensify its restructuring, brand chief Thomas Schaefer told employees on Monday, as workers protested job cuts and the company faced mounting cost and competition pressures. The move comes days after the carmaker cut its 2026 operating-margin forecast to no more than 1%.

Reuters reported Schaefer said measures agreed in 2024 had not been enough and that Volkswagen would significantly step up its performance program. The company and employee representatives are expected to discuss what comes next.

Volkswagen plans to cut a further 50,000 jobs under a restructuring deal agreed with stakeholders this month. Its wider Future Plan also targets a simpler business, including reducing the model lineup by as much as half and cutting overhead costs by 20%.

The protests took place at Volkswagen, BMW and parts supplier Bosch. Union leaders called for stronger protection against competition from China, more effective European Union subsidies and continued phased retirement options.

Volkswagen’s revised forecast reflects a weaker market, especially in China, additional restructuring expenses and a major Porsche-related write-down. The company expects about €10 billion in special charges this year, including a roughly €6 billion non-cash impairment tied to Porsche goodwill.

Excluding those special items, Volkswagen estimates its 2026 operating margin would be about 4%. The forecast cut shows how one-time costs and falling expectations for business in China are weighing on reported earnings, even as management pushes for savings.

The company’s new plan aims for a 9% operating margin by 2030, based on average annual sales of 9 million vehicles. Investors will look for more detail on how job reductions, capacity cuts and product changes can close the gap between that target and this year’s outlook.

Volkswagen is due to publish results for the first nine months of 2026 on October 29. Those figures should show the impact of the latest charges and whether the restructuring push is beginning to ease pressure on profits.