Volkswagen, Blume prepares to cut 100,000 jobs. Four factories at risk
Volkswagen is preparing for the most radical restructuring in its history. CEO Oliver Blume has laid out a plan that includes cutting up to 100,000 jobs worldwide over the next few years, equivalent to about 15% of the group's total workforce. The news was first reported by Manager Magazin, and Volkswagen has not confirmed it yet. The plan is said to have been presented by Blume to the management board in recent days before being passed to the supervisory bodies.
This figure represents a significant escalation from the previously established course. By the end of 2024, the manufacturer had agreed with the works council to reduce about 50,000 jobs by 2030, following months of negotiations with trade unions. The new scheme, if confirmed, would double that number, marking a shift in the cost containment strategy and reopening a front of tension that had just been closed.
On the production front, the plan would put four German plants at risk of closure: the Volkswagen plants in Hannover, Zwickau, and Emden, and the sister brand Audi's factory in Neckarsulm. These sites currently employ about 40,000 workers and have a production capacity of around 750,000 vehicles per year. However, the closures would not occur before 2030, after the current models in production have been completed.
Divestment of the VW brand and decreasing investments
The cuts would also affect management structures. In the areas of administration and development alone, according to reports, up to 5,500 of the around 20,000 executives could lose their jobs, indicating a review that does not spare the highest levels of the organization. The overall cut of 100,000 units is related to a global workforce estimated at around 670,000 people, and this figure reflects the magnitude of the intervention.
Blume's project would redesign the very architecture of the group. Both the Volkswagen brand and the components division would be spun off and transformed into independent companies, detached from the current structure of the group. This move aims to make individual units more streamlined and accountable, in what Reuters describes as the most profound restructuring in the company's 89-year history.
At the same time, management aims to reduce investments by about 15%, bringing them to just over 130 billion euros over the next five years. This change indicates a need to free up resources amid significant pressure on the finances.
The group's difficulties stem from a combination of factors that have overlapped. There are the U.S. tariffs, estimated at about 4 billion euros annually, and a collapse in sales in China, which has approached a 20% drop in a single quarter in what remains the world's largest automobile market.
Additionally, there is the structural burden linked to the transition to electric vehicles, involving substantial investments and compressed margins while the demand for battery-powered cars grows more slowly than expected. This combination has eroded profitability precisely in the group's industrial heartland in Germany, where labor costs remain among the highest in the sector.
Volkswagen declined to comment on the reports, stating only that "the relevant facts of the matter will be discussed and approved by the competent bodies" and that the group does not intend to anticipate the outcome. The new plan is expected to be presented to the supervisory board on July 9.