Volkswagen to Cut Costs by 20% as Profits Plunge Amid Industrial Crisis

Volkswagen has unveiled a sweeping global cost-reduction program aimed at slashing expenses by 20% by the end of 2028 to combat a deepening financial crisis. The move follows a sharp 48% decline in operating profit (EBIT), which fell to approximately €9.9 billion over the first three quarters of the year. As part of these austerity measures, the automaker plans to eliminate 35,000 jobs in Germany alone by 2030 to stabilize its financial position. The company's free cash flow also experienced a dramatic 90% collapse to €514 million, severely limiting its capacity for future R&D and strategic investments. This crisis is fueled by high energy transition costs, stringent EU regulations, and intensifying competition from Chinese and American manufacturers. The restructuring highlights significant structural weaknesses within the German industrial sector, weighing heavily on the DAX index and broader investor sentiment.