VW profits plunge and deep job cuts loom amid tough Chinese competition

Volkswagen reported a sharp decline in profits and lowered its revenue forecast for the year, driven by a sales slump in China and intensifying competition. The German automaker, which is implementing a major cost-cutting initiative, now expects sales to drop by up to 3% in 2025, reversing its earlier prediction of a 3% increase. The profit warning and job cuts affect Volkswagen's global workforce, with up to 100,000 positions potentially eliminated as part of the restructuring. This matters because Volkswagen is the world's second-largest carmaker, and its struggles in China—its largest market—signal broader challenges for legacy automakers facing fierce competition from local electric vehicle manufacturers. The company previously reported revenue of €321.9 billion (£275.3 billion) in 2024, but the current downturn has forced it to revise expectations downward. The cost-cutting program, which includes slashing jobs and streamlining operations, is a response to declining sales and margins in China, where domestic brands like BYD have gained significant market share. Looking ahead, Volkswagen is expected to accelerate its restructuring efforts, potentially closing plants and reducing its model lineup to cut costs and adapt to the rapidly changing automotive landscape.