Volkswagen CEO Oliver Blume has confirmed that the company is considering cutting up to 100,000 jobs globally, a figure that includes 50,000 job reductions previously agreed upon. This move is part of a broader restructuring effort to address the company's significant cost disadvantage, estimated at 20% compared to its competitors. The carmaker's profits have been declining, with operating profit falling to $8.9 billion in 2025 from $19.1 billion in 2024 and $22.6 billion in 2023, necessitating stringent cost-cutting measures.
The job cuts are being driven by several factors, including billions of euros in tariff costs, intense competition, particularly in the Chinese market where sales were down 26% in the first half of the year, and pressure to improve efficiency within its German manufacturing network. The restructuring plan, described as the "most comprehensive realignment in the company's history," involves "12 initiatives, approximately 150 pages and 45 individual resolutions." Blume informed staff of these plans in an internal memo, emphasizing the need to become "more efficient, more robust and simpler."
Despite the CEO's push for these changes, labor representatives have reportedly rejected the comprehensive restructuring plan, and the supervisory board initially rejected a proposal to close four factories in Germany. The 50,000 job cuts previously agreed upon were intended to occur by 2030 across the Volkswagen Group in Germany, including its Porsche and Audi subsidiaries, to save an estimated $15 billion. Some industry analysts suggest that the public announcement of up to 100,000 potential job cuts might be a negotiating tactic, implying that the final number could be lower.
