Volkswagen CEO Oliver Blume informed employees in an internal memo that the company faces the need to cut approximately 50,000 more jobs worldwide. This potential reduction comes on top of 50,000 positions already slated for elimination across the group, including its Porsche and Audi brands. The move is aimed at addressing a significant 20% cost disadvantage compared to rival automakers and streamlining operations amidst slumping profits, high tariff costs, and intense competition in China.
Blume's memo, which effectively confirms reports of up to 100,000 potential job cuts, also highlighted the uncertain future of several German plants. He stated that the company cannot confirm "competitive use cases" for factories in Emden, Hanover, Zwickau, and Neckarsulm (an Audi site) in the 2030s. Despite this, he expressed a preference for "intelligent solutions" over outright plant closures, suggesting options like producing Chinese Volkswagen models in Europe or shifting to defense industry manufacturing for underutilized facilities.
The revelations followed a supervisory board meeting where labor representatives reportedly blocked initial restructuring proposals that included job cuts and factory closures. Volkswagen's public statement after these talks, however, focused on plans to reduce production capacity to 9 million vehicles annually from 10 million and to gradually halve its sprawling lineup of models, measures that analysts consider insufficient to tackle the company's deep-seated problems. Blume acknowledged that details are still being worked out, with more meetings planned to find solutions for the company's challenges, which stem from its outdated business model, high costs in Europe, and weakened position in the Chinese market.
