Volkswagen Eyes Slashing 100,000 Jobs and Closing Plants to Secure Future

Volkswagen AG is planning to cut tens of thousands of additional jobs and potentially shutter multiple factories in an aggressive push by Chief Executive Officer Oliver Blume to make Europe’s largest automaker more competitive.

The proposals, presented by Blume during a management board meeting earlier this week, include doubling previously planned staff reductions to as many as 100,000 positions, according to Bloomberg.

The Porsche and Audi owner currently employs approximately 657,000 people globally.

Blume has been attempting to slim down the automotive giant as it confronts U.S. tariffs, persistent operational weakness in the Chinese market, and intensifying competition within Europe from rivals including BYD Co. and Stellantis NV.

His newly formulated strategy will be formally presented to the supervisory board next month, signaling the start of what is expected to be months of highly tense labor negotiations.

Overhead Targets and Shuttered Plants

The renewed restructuring drive involves slashing general overhead costs by €11 billion ($12.5 billion) by the end of this decade.

It also includes the medium-term closure of four German manufacturing facilities to streamline operations.

The targeted production facilities include an Audi site in Neckarsulm, as well as core VW brand plants in Hanover, Zwickau, and Emden.

Blume is additionally considering separating component plants and partitioning the namesake VW brand into a distinct entity to make the broader group leaner.

The core nameplate has long struggled with depressed levels of profitability.

Industrial Headwinds and Labor Resistance

The streamlining efforts at Volkswagen underscore broader systemic structural struggles across the German industrial landscape.

Mercedes-Benz Group AG is planning to discuss deeper cost-reduction programs with labor representatives, while BMW AG issued a drastic profit warning earlier this month, causing its shares to tumble.

Labor leaders were swift to reject the newly disclosed strategy.

A joint statement issued by the company’s works council and the IG Metall union warned that the proposals deeply unsettle the workforce and the regions where Volkswagen operates, promising to oppose the measures with all their might.

Pushing through large-scale job cuts at Volkswagen has historically proven difficult, as restructuring efforts are frequently watered down by political blocks.

Worker representatives occupy half of the seats on the carmaker’s supervisory board, while the German state of Lower Saxony, which traditionally aligns with labor unions, controls another two seats.

Structural Overhaul Progress

Volkswagen must undergo profound change, according to a company spokesperson who declined to comment on the specifics of the restructuring report.

The executive board has been working intensively over the past few months on a future-oriented plan to realign the corporation.

The chief executive has already secured some structural progress, including the sale of a 51% stake in the Everllence marine-engine unit to raise cash reserves.

Approximately 28,000 workers have already agreed to separate from the manufacturer as part of an earlier-announced push to reduce headcount by 50,000 across the group by 2030.

Furthermore, Volkswagen has whittled down its absolute production capacity from 12 million vehicles annually toward a more realistic target of 9 million vehicles.

Volkswagen shares rose by as much as 1.2% in Frankfurt trading following the news, though the stock remains down by a quarter cumulative this year.