Volkswagen CEO Oliver Blume is preparing the most severe restructuring in the company's 87-year history. The plan targets up to 100,000 job cuts globally and the closure of four German factories, sources familiar with the matter confirm.
The overhaul reflects VW's struggle to compete in the EV transition while managing legacy costs. The German automaker faces mounting pressure from Chinese competitors flooding the market with affordable electric vehicles and pressure to meet tightening emissions regulations across Europe.
Blume has signaled for months that VW needed dramatic action. The company's profitability has declined as sales of traditional combustion engines shrink faster than EV ramp-up can compensate. Labor costs in Germany remain among the highest globally, making the company uncompetitive on price against Tesla, BYD, and rising Chinese manufacturers.
The four German factory closures would represent an unprecedented shift. VW currently operates major plants in Wolfsburg, Zwickau, Emden, and Dresden among others. Any closure would trigger intense negotiations with German unions, which hold substantial works council representation on VW's board. The IG Metall union has already vowed to resist cuts.
The 100,000 job reduction spans multiple facilities across VW's global workforce. The company employed roughly 645,000 people as of 2023. This magnitude of cuts signals VW's intent to rightsize operations for an EV-dominated future where factories require fewer workers due to simpler drivetrains and assembly processes.
VW's troubles extend beyond Germany. The group owns Audi, Porsche, Skoda, and other brands, all facing similar pressures. A coordinated restructuring across the portfolio could prove even more disruptive than individual brand cuts.
The timing matters. German politics have shifted with the collapse of Chancellor Scholz's coalition