- VW’s finance boss warns, “We have no time to lose,” as “market changes are profound and lasting.”
- The company has slashed its operating margin forecast from four to just one percent.
- Porsche denies it's cutting another 4,100 jobs beyond the already announced 8,900 layoffs.
The Volkswagen Group is in the red, and we’re not just talking about this illuminated badge we cherry-picked as the top image. The latest plan to slash costs could ultimately lead to 100,000 layoffs across all brands, one of which may even cease to exist. While a final decision hasn’t been made, a “gradual phase-out of the SEAT brand” is officially under consideration.
Meanwhile, the German automotive juggernaut has cut its operating-margin forecast from four to just one percent. Weaker demand in China and rising energy costs have created the perfect storm, further amplified by the meteoric rise of Chinese automakers at home and in many international markets.
And while VW’s electric vehicle sales are rising, fueled by a new influx of models like the ID. Polo, EVs are still nowhere near as profitable as combustion-engine cars, the very models the European Union is pressuring automakers to phase out. Saying the situation is worrying would be an understatement. Bloomberg quotes VW Group’s finance boss Arno Antlitz, who candidly admitted that “the market changes are profound and lasting” and “we have no time to lose.”
Porsche Denies More Layoffs Are Planned
As if that wasn’t bad enough, a new report by Handelsblatt claims Porsche is planning an additional 4,100 job cuts, on top of the already agreed 8,900 layoffs. However, an internal memo sent by CEO Michael Leiters to employees and seen by Reuters says otherwise: "There are no plans to cut an additional 4,000 jobs at Porsche."
The VW Group is also going after a less obvious source of complexity: the parts bin. The group plans to slash component variety by as much as 75 percent on next-generation models. There will also be dramatically fewer cars to choose from, as the company wants to reduce the number of available models by up to 50 percent. For example, the long-running Touareg is now dead.
The downsizing could mean even more plant closures after Audi Brussels in Belgium closed last year. VW’s Emden, Zwickau, and Hanover sites, along with Audi’s factory in Neckarsulm, don’t have any new models allocated beyond the current-generation vehicles. These sites could serve a different purpose, but a final decision hasn’t made a final decision. Meanwhile, the Osnabrück factory, where the T-Roc Convertible is currently assembled, will become a competence center for security and defense solutions.
From Bad To Worse
It’s safe to say that things are going from bad to worse for VW. After years of warnings about high costs, weak demand in China, and increasing competition from Chinese automakers, Germany’s biggest carmaker has just delivered another painful reminder that its problems aren’t going away.
The days of being all things to all people may be coming to an end. And given how much VW has built up over the decades, tearing it back down could prove almost as difficult as building it in the first place.
2026 VW Mission Efficiency concept
Motor1's Take: There’s no shortage of irony here. VW spent decades becoming one of the world’s largest automotive groups by selling everything from tiny hatchbacks to Bentleys, Lamborghinis, Porsches, and heavy-duty trucks. Now, after building that enormous empire, it must figure out how to make the whole thing smaller, simpler, and cheaper.
Lest we forget, Bugatti has already left the corporate umbrella, and the future doesn’t look great for the SEAT brand. On top of that, Bloomberg reports that motorcycle maker Ducati could be put up for sale.
With six-figure job cuts looming, a downsized production network, and a simplified product portfolio, the VW Group of tomorrow will look drastically different.
