Workers Brace for Mass Layoffs as Germany's Auto Industry Cuts €12.7 Billion in Profit
30.06.2026 - 02:02:04 | boerse-global.de
IG Metall and works councils are mobilizing for a fight as Volkswagen, Mercedes-Benz and BMW accelerate cost-cutting measures that could eliminate tens of thousands of jobs across Germany's industrial heartland.
The pushback follows a barrage of bleak earnings reports. Volkswagen's operating profit tumbled 44 percent in 2025 to €6.9 billion. Mercedes suffered a 57 percent slide to €5.82 billion. BMW now expects profit margins of just one to three percent, sending its shares to a six-year low in June.
At Volkswagen, the board submitted a 43-page document on June 25 answering 86 questions from the general works council about CEO Oliver Blume's restructuring program Zielbild 2030. Concrete job-cut numbers remain absent from the reply, but media reports have speculated that up to 100,000 positions could disappear. Plant closures in Hannover, Emden, Zwickau and Neckarsulm are also under discussion.
The supervisory board is scheduled to convene on July 9 to review the proposed concepts. Labor representatives and the union have already pledged fierce resistance.
Mercedes management is demanding that employees work 35 hours a week without overtime pay — effectively unpaid extra hours. A planned special payment equivalent to 18.4 percent of one month's salary has been pushed back to 2027, summer bonuses are scrapped, and voluntary redundancy programs are underway.
BMW is planning to cut roughly 7,700 jobs worldwide, about five percent of its workforce.
The pain extends beyond automakers. A study by management consultancy Horváth projects that German industry could lose up to 100,000 jobs by the end of 2026. Nearly 60 percent of companies surveyed intend to reduce headcount, mainly by shifting production abroad. Machinery and construction are also heavily affected.
Several factors are driving the downturn. China, a crucial market, is weakening: Mercedes posted a 27 percent drop in first-quarter 2026 sales there. High energy costs and US tariffs compound the pressure. While the European market eked out a modest 3.6 percent gain in May, geopolitical tensions continue to darken the global outlook.
