According to reports on Monday, Volkswagen CEO Oliver Blume warned that the company may need to further cut fifty thousand jobs. This is actually the first time the company has confirmed considering eliminating up to a total of one hundred thousand positions.
Amid intensifying competition and continued soft consumer demand in the Chinese market, the management faces significant pressure to cut costs and maintain competitiveness. Previously, this automaker had agreed to cut fifty thousand jobs across the entire group.
An internal memo seen by Reuters indicated that Volkswagen has a 20% cost gap with similar competitors, necessitating further cost reductions. The memo stated that this means an additional fifty thousand job cuts are “theoretically needed” globally.
Blume stated in the document, “We are currently evaluating all brands, companies, and regions to determine the actual extent of necessary workforce reduction.” Previously, the company had declined to comment on reports that it was considering laying off up to one hundred thousand people.
Prior to the release of this memo, the Supervisory Board held a meeting last Thursday, during which labor representatives rejected Blume’s restructuring proposal. The rejected plan reportedly included layoffs and potential closure of four plants, specifically mentioning the Emden, Hanover, Zwickau, and Neckarsulm factories. Blume expressed uncertainty about the factories’ sustainable competitiveness and clear pathways for transformation in the 2030s.
He mentioned a preference for “intelligent solutions” rather than directly shutting down plants. Previously, he had suggested options such as converting underutilized factories to defense industry manufacturing or introducing Volkswagen models from the Chinese market for local production in Europe.
Yahoo Finance reported that during the executive meeting last Thursday to discuss the layoff proposal, the German metalworkers’ union (IG Metall) mobilized workers nationwide for demonstrations, while the Works Council publicly expressed dissatisfaction over the weekend.
Earlier reports had mentioned that Volkswagen was considering a total of up to one hundred thousand job cuts and the closure of four German plants by the end of June, representing the most thorough restructuring in the automaker’s history. A union agreement reached by the end of 2024 had promised the company would cut around fifty thousand positions by 2030. As of the June annual shareholder meeting this year, over 28,000 employees from Volkswagen, Audi, Porsche, and CARIAD software division had signed separation agreements.
With the persistently sluggish Chinese automotive market, alongside local manufacturers expanding market share, German automakers experienced a sharp decline in sales in the second quarter in China. Sales data indicated Volkswagen, Mercedes-Benz, and BMW saw sales drop by at least 30% year-on-year in the second quarter. According to figures released last Friday, Volkswagen saw the largest decline in China sales, reaching 36.6%.
Last Thursday, Volkswagen also outlined a restructuring plan that would reduce its model lineup by up to half and lower global annual production capacity from about 12 million vehicles pre-pandemic to 9 million. Since the beginning of 2026, Volkswagen’s stock market value has declined by over 30%.