New Delhi | Europe’s leading automobile manufacturer, Volkswagen AG, is preparing for one of the most significant restructuring exercises in its history. According to media reports, the company is considering cutting up to 100,000 jobs over the next few years while also evaluating the closure of four major manufacturing facilities in Germany. If implemented, the move would mark one of the largest restructuring programmes ever undertaken by the automaker.
Reports indicate that Volkswagen Chief Executive Officer Oliver Blume presented the new restructuring strategy during a management board meeting earlier this week. Under the proposal, the workforce reduction target could be doubled from previous estimates to nearly 100,000 employees. The Volkswagen Group currently employs approximately 657,000 people worldwide. The initiative is aimed at reducing operating costs and improving the company’s competitiveness in an increasingly challenging global automotive market.
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As part of the restructuring plan, Volkswagen is also considering shutting down four major German production facilities. These include Audi’s Neckarsulm plant and Volkswagen’s Hanover, Zwickau and Emden factories. The company is also evaluating changes to several component manufacturing units and the organisational structure of the Volkswagen brand to improve efficiency and optimise resource utilisation.
Volkswagen has set a target of reducing overhead costs by approximately €11 billion by the end of the decade. In recent years, the company has faced multiple headwinds, including declining sales in China, the impact of US trade tariffs, and intensifying competition in Europe from electric vehicle manufacturers such as BYD and Stellantis. These challenges have weighed heavily on the company’s profitability and accelerated the need for structural reforms.
To strengthen its financial position, Volkswagen has already begun reshaping its asset portfolio. The company recently sold a 51% stake in its Everllence marine engine business to generate additional capital. Management believes such measures will support future investments while enhancing long-term financial stability.
This is not the first time Volkswagen has announced plans to reduce its workforce. The company had previously outlined a strategy to eliminate 50,000 jobs across the group by 2030. According to Volkswagen, around 28,000 employees have already agreed to leave the company voluntarily under retirement and separation programmes. In addition, the automaker is moving to reduce its annual production capacity from approximately 12 million vehicles to around 9 million vehicles.
The proposed restructuring has triggered a strong backlash from employee representatives. Volkswagen’s Works Council and the IG Metall union issued a joint statement expressing serious concern over the potential job losses and factory closures, warning that the measures could have severe economic consequences for workers and the communities dependent on the company’s operations. The unions have vowed to resist the proposals if management attempts to move forward with them.
Industry observers note that implementing such large-scale workforce reductions will not be straightforward. Half of the seats on Volkswagen’s Supervisory Board are held by employee representatives, while the German state of Lower Saxony, which also has representation on the board, has traditionally supported labour interests. As a result, any restructuring plan is expected to involve prolonged negotiations between management and employee representatives.
As the global automotive industry undergoes a rapid transformation driven by electrification, digital technologies and evolving consumer preferences, Volkswagen’s restructuring programme is likely to become one of the defining developments shaping both the company’s future strategy and the broader direction of the global automotive sector.
