Volkswagen Group is bracing for significant restructuring, including potential job cuts, after reporting a substantial decline in profits for 2025. The German automotive giant saw its operating profit fall 53% to €8.9 billion (approximately $9.5 billion USD), while net profit dropped 44% to €6.9 billion (approximately $7.3 billion USD), according to company filings. The downturn is attributed to factors including U.S. Tariffs, investments in electric vehicles, and a nearly 98% decrease in sales at its Porsche division.
Despite the broader group’s challenges, Škoda Auto reported a record year in 2025, with revenue increasing by 8.3% to CZK 734.4 billion (approximately $31.8 billion USD) and operating profit reaching roughly CZK 61 billion (approximately $2.6 billion USD). The brand delivered 1,043,900 vehicles to customers globally, exceeding one million units for the first time in six years. This strong performance raises questions about Škoda’s role within the wider restructuring plan.
Volkswagen intends to reduce its workforce by up to 50,000 positions by 2030, a move announced in a letter to shareholders. The company cited the need to cut costs and adapt to changing market conditions. However, Škoda Auto representatives indicate that the cuts are not expected to directly impact its manufacturing operations in the Czech Republic.
“Škoda Auto has been continuously managing its workforce for many years to maintain the competitiveness of our plants in the Czech Republic,” said Martin Vejdělek, a Škoda Auto spokesperson. “This includes a program, communicated in 2024, to reduce the number of indirect employees by 15% by 2028, utilizing natural demographic fluctuation, while 5% will be reinvested into new strategic areas.”
Škoda Auto is also moving forward with expansion plans, including the opening of a new battery systems hall expected to employ up to 600 people. The company is preparing to launch new models, including the Epiq and Peaq electric vehicles, later in 2026. Škoda’s success contrasts sharply with the struggles of Porsche, which saw its operating profit plummet from €5.3 billion to just €90 million in 2025 – a decrease of approximately 98%.
Škoda Auto’s strong performance extends beyond its home markets, with sales doubling in India and gains in Vietnam, Turkey, and Morocco. The company currently offers 12 passenger car models, including the Fabia, Scala, Octavia, Superb, Kamiq, Karoq, Kodiaq, Elroq, and Enyaq, as well as India-specific models Slavia, Kylaq, and Kushaq. The company plans to offer 14 model lines with combustion, hybrid, and all-electric powertrains by the end of the year.
The Škoda Octavia remains the brand’s best-selling model, with over one million units sold since the launch of the fourth generation in 2020. The company’s success is driven by a strategy of offering customers choice in powertrain options, maintaining a broad portfolio of combustion engine vehicles alongside its electric and hybrid offerings.
The broader restructuring at Volkswagen reflects the challenges facing the automotive industry as it transitions to electric vehicles. According to a report in Bild, the company is intensifying its cost-cutting measures, with approximately 50,000 jobs slated for elimination across the group in Germany by 2030. The initial agreement to reduce job cuts to 35,000 has been revised, signaling a more aggressive approach to restructuring.
In addition to tariffs and EV investments, Porsche’s dramatic decline in profitability is a key driver of the cost-cutting measures. The brand’s operating profit plummeted from €5.3 billion to €90 million in 2025, a decrease of approximately 98%. This downturn, detailed in Bild, represents a significant setback for the Volkswagen Group.
