Volkswagen board approves plan to cut another 50,000 jobs

Volkswagen Board Approves Plan to Cut Another 50,000 Jobs

Volkswagen's supervisory board on Thursday approved a transformation plan to eliminate roughly 50,000 additional roles. This new round of layoffs follows a previous reduction of 50,000 positions already under way, bringing the total workforce reduction to 100,000 by the end of the decade.

The move marks the most extensive restructuring in the 89-year history of the automaker and the most sweeping shake-up on record for the global car industry. The combined 100,000 job losses represent close to 15 percent of the conglomerate's global headcount, surpassing the 50,000 positions General Motors shed during its 2009 bankruptcy filing.

CEO Oliver Blume stated the plan is a strong signal for the future of the Volkswagen Group and will make our iconic brands even more attractive, stronger and competitive. Blume added that the company is taking responsibility for industrial jobs worldwide, its partners, and its entire workforce.

Strategic Pivot and Market Pressures

The restructuring comes as the 10-brand conglomerate — which includes Audi, Porsche, SEAT, and Skoda — faces pressure from multiple directions. Volkswagen's profit margin fell to its lowest in at least a decade in 2025. The company also reported a 30% drop in after-tax earnings for the first half of the year, driven by a hit to sales in China, which was once the group's cash cow.

The company is currently squeezed between U.S. Import tariffs and an inconsistent appetite for its electric vehicle lineup. Simultaneously, it faces intensifying rivalry from aggressive Chinese manufacturers in both their home market and export markets.

To counter these headwinds, the board approved a plan to slim the company's model line by around 50%. By reducing the number of models, the company aims to increase volumes per model and lower fixed costs. The strategy also includes a shift toward leaner leadership structures and shorter lines of decision.

Domestic Plant Uncertainty

A central point of the plan involves four German plants: Emden, Zwickau, Neckarsulm, and Hannover. Volkswagen stated that a competitive future production allocation ... cannot be secured for these sites, as the company has excess production capacity of 500,000 vehicles in Europe. These plants face a staggered phase-out starting from 2031 onwards.

While the company is exploring alternative purposes for these locations, the long-term viability of the sites remains uncertain. If any of these facilities close, it would mark the first time Volkswagen has closed a full production plant on German soil.

The potential closures have caused local alarm. Martin Lehmann, an employee at the Zwickau site since 2012, told AFP that shutting the plant would devastate the region, as the factory and its local supply chain serve as the economic backbone of the area.

Political and Labor Negotiations

The agreement follows weeks of tense negotiations involving the board, majority owner Porsche SE, unions, and the regional government of Lower Saxony, which holds a stake in the company.

Tensions peaked after reports leaked that management had considered an extraordinary general meeting to push plans through against workers and Lower Saxony. The IG Metall union dismissed reports that management sought to bypass the supervisory board as nonsense. Furthermore, unions accused executives of withholding information from staff after the 100,000-job figure was leaked to the press before formal briefings.

The final deal averts a major clash and limits the influence of the supervisory board, where unions and Lower Saxony hold a majority, on key decisions. It also removes the possibility of a spinoff of Volkswagen's components and passenger car businesses.

Daniela Cavallo, the chief employee representative, stated the plan was a necessity for our company to move successfully into the next decade without the associated undertakings coming only on the side of the employees. Olaf Lies, the governor of Lower Saxony, described the plan as a shared path toward the necessary transformation in the face of enormous challenges.

Frankfurt-listed Volkswagen shares closed 7.9% higher following the announcement. Discussions regarding the specific future of the four flagged German plants are expected to take place over the next 10 months.