Volkswagen CEO Oliver Blume has informed staff in an internal memo that the company may need to cut approximately 50,000 more jobs to improve its competitiveness, effectively acknowledging reports that the automaker is considering up to 100,000 job reductions. This comes after 50,000 job cuts, including those at Porsche and Audi subsidiaries, were already agreed upon. The company faces a 20% cost disadvantage compared to its rivals and aims to achieve an operating margin target of 8% to 10% from its current 2.8% in 2025.
Blume is working to streamline operations amidst slumping profits due to billions of euros in tariff costs, intense competition in China, and pressure to enhance the efficiency of its German manufacturing network. The memo, which described the additional 50,000 cuts as a "theoretical deduction," stated that the company is evaluating the necessary adjustments across all brands, companies, and regions. Labor representatives reportedly blocked earlier proposals that included job cuts and the potential closure of four factories located in Emden, Hanover, Zwickau, and Neckarsulm.
Blume expressed a preference for "intelligent solutions" over outright plant closures, suggesting alternatives such as producing vehicles for the defense industry or manufacturing Chinese Volkswagen models in Europe to utilize underperforming factories. While 28,000 employee departures have been agreed upon by 2030, with 19,000 jobs in Germany expected to be cut by the end of 2026, many of these are planned through natural attrition, early retirement, and voluntary departures to avoid forced layoffs. This approach has been noted by other industries in Europe as a template for workforce reduction.
