Volkswagen Reports 64% Profit Drop Amid Job Cuts

Volkswagen has reported a staggering 64% drop in post-tax profits for the third quarter of 2024, largely attributed to weak sales in China and persistent software issues from its Cariad division, which lost over €2 billion. Operating profit fell to €2.86 billion, marking the worst operating margin since the pandemic, as revenue slightly declined to €78.5 billion. In response, VW is considering closing three German plants and laying off tens of thousands of employees as part of an urgent cost-cutting plan amid fierce competition from Chinese automakers. The company has also canceled a long-standing job security agreement, prompting potential strikes from the IG Metall union. VW's executives stress the need for efficiency gains and have acknowledged the challenges posed by government emissions targets and the high costs of competition in both European and Chinese markets. As the company grapples with these financial pressures, it must navigate complex negotiations with labor unions regarding pay cuts and job security.