The chief executive of German car giant Volkswagen Group has confirmed that it intends to cut up to 100,000 jobs, double what was previously stated.

The group, which includes Porsche, Audi, Seat and Skoda as well as the VW brand, had previously said it would cut around 50,000 jobs in Germany by 2030.

It suffered a sharp drop in profits last year, as a result of falling sales in key markets, as well as growing competition from Chinese brands moving into Europe.

In a widely circulated memo to staff, chief executive Oliver Blume said the group’s costs were 20% higher compared to rival businesses, and it would need to reduce its expenses further.

This, he said, would mean a theoretical loss of 50,000 jobs worldwide.

“We are currently evaluating across brands, companies and regions how many adjustments are really necessary and feasible,” he said.

“We need to be more efficient, more robust and simpler. We must reduce our costs.”

He added that the company “has not been able to confirm” alternative uses for four factories in Germany that had previously been threatened with closure.

Two of the plants, in Zwickau and Emden, are used for the production of electric cars. But, like other factories in Hanover and Neckarsulm, it is considered expensive to operate.

VW’s profits have fallen sharply in recent years. In 2023, it made an operating profit of €22.6 billion ($25.8 billion, £19.3 billion). This figure dropped to €19.1 billion in 2024, and then to just €8.9 billion last year.

The group has been hit hard by a drop in sales in China, once one of its most lucrative markets. In the first six months of the year they fell 26% compared to last year.

In the United States, sales fell more than 7%, partly due to the impact of tariffs on auto imports introduced by the Trump administration.

Meanwhile, Chinese brands have been moving aggressively into international markets, introducing new technologies while benefiting from lower production costs than European rivals.

This has increased pressure on established brands to keep their own costs under control and has slashed profit margins.

In late 2024, following threats of mass strikes, VW reached an agreement with German union IG Metall to cut 35,000 jobs at its eponymous brand by 2030, in a “socially responsible manner”, and would cut another 15,000 jobs at its other brands.

The plans now being discussed seem to go much further.

Last week, widespread protests occurred at Volkswagen plants across the country, ahead of a meeting of VW’s supervisory board, which includes labor representatives as well as company managers.

Some industry analysts suggested to Agence France Presse that Volkswagen had deliberately released the 100,000 figure as a negotiating tactic and that the final figure for cuts would likely be lower.