Volkswagen Group is examining workforce reductions of as many as 100,000 jobs globally, twice the level previously outlined, as Chief Executive Oliver Blume pushes Europe's largest auto group to close a 20% cost gap with competitors and simplify a manufacturing network strained by weaker sales, the electric-vehicle transition and growing competition from Chinese automakers.
Blume disclosed the potential scale of the reductions in an internal memo to employees, while stopping short of presenting 100,000 cuts as a finalized target. Volkswagen, whose brands include Porsche, Audi and Skoda, had previously outlined plans to eliminate 50,000 positions in Germany by 2030.
"We are currently assessing across all brands, companies and regions how many adjustments are actually necessary and feasible," Blume wrote in the memo. "We need to become more efficient, more robust, and simpler. We must reduce our costs."
The expanded review follows a steep decline in Volkswagen's profits last year. The company has been squeezed by sluggish vehicle demand, rising pressure from Chinese brands expanding across Europe and weaker U.S. sales that were partly affected by tariffs on imported automobiles.
Blume told employees that Volkswagen's costs are 20% higher than those of its rivals, sharpening pressure on management to pursue reductions beyond its existing restructuring plans. He also said the company had been "unable to confirm" alternative uses for four German factories that have previously faced the possibility of closure.
The 100,000 figure has quickly become the focal point of Volkswagen's restructuring debate, but some automotive analysts question whether the company will ultimately eliminate that many positions. Analysts cited by Agence France-Presse suggested the number could represent a worst-case scenario placed into the public discussion ahead of negotiations with powerful labor groups.
Such an approach would follow a familiar pattern at Volkswagen. In the second half of 2024, the company faced threats of mass strikes before reaching an agreement with German trade union IG Metall to cut 35,000 jobs at the Volkswagen brand by 2030 in a "socially responsible manner."
Another 15,000 positions were set to be eliminated across Volkswagen's other brands, bringing the previously planned reduction to roughly 50,000 jobs. The latest warning could therefore serve as an opening position for a new round of negotiations rather than a final head-count target.
Labor tensions are already rising. Workers staged protests at multiple Volkswagen sites across Germany last week ahead of a supervisory board meeting involving company executives and labor representatives.
The structure of Volkswagen's governance gives employees considerable influence over major corporate decisions, making negotiations with labor groups a central part of any large-scale restructuring. That dynamic complicates management's efforts to quickly reduce capacity or close underused facilities.
At the same time, Volkswagen's investment in electric vehicles has created additional financial and operational pressure. The company has spent billions of euros developing dedicated EV platforms and battery manufacturing operations, but European electric-vehicle demand has expanded more slowly than expected.
That slower growth has left some production facilities operating below capacity. Volkswagen's EV-focused factories in Zwickau and Emden remain under scrutiny because of relatively high operating costs, while plants in Hanover and Neckarsulm are also being reviewed as management examines its manufacturing footprint.
The potential workforce reductions are only one element of a broader overhaul under consideration. Volkswagen is evaluating whether to reduce its global vehicle lineup by as much as 50%, a move designed to lower engineering complexity and development costs.
Management is also considering reducing annual production capacity from roughly 12 million vehicles to 9 million. Such a cut would represent a 25% reduction in capacity and signal that Volkswagen no longer expects global demand to fully support the manufacturing network it built during stronger periods of automotive growth.
