Volkswagen is reportedly planning a significant overhaul, including cutting up to 100,000 jobs over the coming years and ceasing production at four German plants: Hanover, Zwickau, Emden, and Audi's Neckarsulm site. This move, which would represent roughly 15% of its workforce, is considered the most radical restructuring in the company's 89-year history and is driven by intensifying competition from Chinese car brands, a costly transition to electric vehicles, and US tariffs. The cuts would expand upon previously agreed-upon reductions, with around 50,000 jobs expected to be cut across Germany by 2030.
Key figures within Volkswagen, including CEO Oliver Blume, are pushing for these deep cuts to boost profitability. The company also intends to reduce planned investment by about 15% to just over €130 billion ($148.2 billion) over the next five years. This comes as Volkswagen's market share in China has declined significantly, falling behind BYD in 2024 and further to third place in 2025. Chinese automakers are also rapidly expanding into Europe, doubling their combined European market share through May from a year ago.
The proposed changes are expected to face strong resistance from Volkswagen's General Works Council and Germany's powerful IG Metall union, who have vowed to prevent such measures. Lower Saxony, as the company's second-largest shareholder, has also indicated opposition to plant closures. Volkswagen's shares have reflected investor concern, trading around 16-year lows and falling more than 25% year-to-date, suggesting skepticism about the success of the plan.
