Volkswagen has cut its workforce by around 7,000 since starting its cost-cutting efforts in late 2023. The company’s CFO, Arno Antlitz, said on a call following its first-quarter results that the company is continuing to implement agreed measures. Europe’s largest carmaker reported a 40.6% decrease in net profit to 2.19 billion euros ($2.49 billion) in the first quarter, despite revenue rising 3% to 77.56 billion euros. The company warned of muted business for the rest of the year due to trade tensions and one-off costs, including restructuring costs at its troubled software unit and EU fines for selling too many polluting vehicles. For the rest of the year, Volkswagen expects business to be “towards the lower end” of its guidance, citing challenges including increased competition, more stringent emissions regulations, and trade tensions. US President Donald Trump has threatened and imposed tariffs on car imports, with North America taking just over 11% of Volkswagen vehicle deliveries in the first quarter. Volkswagen’s finance chief, Arno Antlitz, said it was “too early to say” if the company would step up manufacturing in the United States to circumvent tariffs. The company expects a profit margin of between 5.5 and 6.5% for the coming year, but its guidance does not take account of changeable American tariffs. European carmakers have struggled to assess the full impact of US tariffs, with the Trump administration continuing to change its position with caveats, exemptions, and delays. Porsche AG has cut its profit outlook due to the impact of tariffs and weaker-than-expected sales of electric vehicles.
Reference : https://www.livemint.com/companies/news/volkswagon-layoffs-german-auto-giant-slashes-headcount-by-7-000-reduces-factory-costs-at-vw-brand-11746019061359.html
