Volkswagen to cut 100,000 jobs and close four German plants, report says
German automobile manufacturer Volkswagen is considering cutting up to 100,000 jobs and shutting down four German factories in what could become the biggest overhaul in its 89-year history.
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- Volkswagen is considering its biggest restructuring in decades, with potential cuts of up to 100,000 jobs and closures of four German factories.
- The reported plan could affect plants in Hanover, Zwickau, Emden, and Audi’s Neckarsulm site, putting more than 45,000 jobs at risk.
- Volkswagen says its old model of developing cars in Germany, producing them in Europe, and exporting them worldwide no longer works in a changed global market.
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German automobile manufacturer Volkswagen is considering cutting up to 100,000 jobs and shutting down four German factories in what could become the biggest overhaul in its 89-year history.
The planned sweeping layoffs, part of Volkswagen's effort to become “a new company,” were first reported by German business magazine Manager Magazin.
Volkswagen declined to comment on the reported restructuring plans. However, a spokesperson said on Friday that the automotive industry faces significant challenges, including tariffs, competition, and “stagnating, sometimes declining” markets that can lead to “burdens on the company reaching tens of billions of euros per year”.
The plans are due to be discussed at a July 9th meeting, people familiar with the matter told Reuters.
According to Manager Magazin, the company will shut down plants in Hanover, Zwickau, Emden, and Audi's Neckarsulm site, putting more than 45,000 jobs at risk. The potential restructuring would add to Volkswagen's previous plan to cut around 50,000 jobs by 2030 as it grapples with falling sales in China and North America and Trump’s tariffs.
If carried out, the overhaul could become one of the largest restructurings in automotive industry history.
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Manager Magazin also reported that the company will cut investment by about 15% to just over €130 billion over the next five years. Earlier, CEO Oliver Blume outlined a strategy to cut €11 billion in costs.
Volkswagen employs approximately 660,000 people globally across all of its automotive brands (including Audi, Bentley, and Skoda), with roughly 43% of its workforce based in Germany.
“It is correct that the entire automotive industry and the Volkswagen Group are undergoing a profound transformation. The executive board has repeatedly stated that our current business model no longer works across all brands: developing cars in Germany, producing them in Europe and exporting them to the world. The world has fundamentally changed in recent years,” a Volkswagen spokesperson said.
The company has been facing mounting competition from its Chinese rivals. Chinese EV and plug-in hybrid manufacturers are winning on price while offering advanced technology, causing legacy automakers to take a hit in the massive Chinese market.
Volkswagen said in April it had cut €1 billion ($1.17 billion) in overhead costs in the first quarter and planned to reduce global production capacity by another 1 million vehicles, split between China and Europe, as part of its effort to lower manufacturing costs.
“The entire group, including brands and subsidiaries, have to transform profoundly,” the spokesperson added.
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