Hundreds of workers gathered outside the Berlin headquarters of Volkswagen-backed automotive technology company IAV on Tuesday to protest plans to cut up to 1,400 jobs, the latest flashpoint in Germany's strained auto sector.

The IG Metall union organised the protest against the job cuts in Germany by mid-2027, including the effective closure of IAV's Berlin site, affecting about 1,250 employees.

Volkswagen has a 50 per cent stake in the private company, which employs some 5,500 people across five locations in Germany, according to the union. It develops software and engineering solutions for the automotive industry, including electric vehicles and automated driving.

IAV declined to comment. Last week, the DPA news agency reported that the move would reduce overcapacity and boost competitiveness in a difficult market, citing a company spokesperson.

Under the plan, Berlin-based employees would be offered the chance to move to the company's site in Gifhorn, in the state of Lower Saxony. Vacant positions would then be relocated abroad to reduce costs, the union said.

"We won't let ourselves be driven away. We're fighting for Berlin," works council chairperson Tanja Schneider told Reuters, as workers distributed flags and whistles at the protest. "We want to negotiate and we want a reasonable, sustainable, viable vision for IAV."

The German auto industry is struggling with high costs and weak demand, impacting carmakers' ability to respond to steep tariffs, growing competition from China and a costly transition to electric vehicles.

In a previous statement, Volkswagen voiced support for IAV's plans while stressing that they must be implemented in agreement with employee representatives.

The German auto group is itself under pressure to tighten its belt further after operating profit more than halved last year.