Volkswagen plans to eliminate about 50,000 jobs in Germany by 2030 after reporting its weakest earnings in years, deepening a sweeping restructuring at Europe’s largest carmaker.

Chief executive Oliver Blume outlined the cuts in a letter to shareholders, saying the reductions would span the Volkswagen Group’s operations in Germany. The move expands on an earlier agreement with powerful works councils and unions to shed 35,000 positions, largely at the core VW brand, as part of a drive to save 15 billion euros annually.

The additional job losses will fall on premium marques Audi and Porsche, as well as the group’s troubled software arm Cariad, which has struggled with delays and cost overruns on key digital platforms. Management has framed the cuts as essential to restoring competitiveness in a rapidly changing global auto market.

Volkswagen’s earnings after tax dropped about 44 percent, falling to 6.9 billion euros, the lowest level since the aftermath of the diesel emissions scandal. The company cited a combination of US tariffs on non-American carmakers, intensifying competition in China and the costly overhaul of Porsche as major drags on performance.

Once the dominant foreign manufacturer in China, Volkswagen has been losing ground to domestic rivals such as BYD and Geely, which have capitalised on faster innovation cycles and aggressive pricing in electric and hybrid vehicles. At the same time, VW is grappling with sluggish demand for electric cars in Europe, even as it pours billions into new models and battery technology.

Finance chief Arno Antlitz warned that the group’s current profit margin is “not sufficient in the long run” and signalled that further belt-tightening is inevitable. Volkswagen is targeting a core profit margin of between 4 and 5.5 percent in 2026, potentially below the 4.6 percent it recently achieved once restructuring and Porsche-related costs are stripped out.

The company has already flagged a multibillion-euro hit linked to Porsche’s decision to extend the life of its petrol-powered models amid weaker-than-expected demand for electric sports cars. Management also highlighted ongoing risks from trade tensions, tariffs and volatile energy and commodity prices, underscoring the fragile backdrop against which the restructuring will unfold.