Volkswagen is reportedly preparing for one of the biggest restructuring exercises in its history, with plans to eliminate up to 1,00,000 jobs and shut down four manufacturing facilities in Germany as the automaker responds to mounting competitive and financial pressures.
According to reports, the proposal, led by Oliver Blume, CEO, would more than double the scale of an earlier restructuring plan that involved around 50,000 job cuts. If implemented, the move would affect nearly one in six employees across Volkswagen’s global workforce of more than 6,57,000 people, making it one of Europe’s largest industrial workforce reductions in recent decades.
The restructuring plan reportedly includes the closure of plants in Hanover, Zwickau and Emden, along with Audi’s facility in Neckarsulm. The proposed shutdowns are linked to product portfolio changes and the discontinuation of certain vehicle models. The move would also mark a significant departure from Volkswagen’s 2024 agreement with labour unions, under which the company had committed to avoiding plant closures in Germany until 2030.
Volkswagen is facing increasing pressure from intensifying competition in the electric vehicle market, particularly from Chinese manufacturers that have gained ground through faster product development and lower production costs.
At the same time, softer-than-expected demand for electric vehicles and underutilised production capacity have weighed on the company’s performance. Investor concerns have also mounted, with Volkswagen’s share price declining by more than 25 per cent this year.
The company has already scaled back its planned investments by around 15 per cent, reducing its five-year capital expenditure to just over €130 billion. The move reflects a broader effort to improve efficiency and preserve profitability amid changing market conditions.
