On Thursday, Volkswagen AG’s supervisory board approved a large-scale cost-cutting plan that will eliminate 50,000 jobs, reduce the number of company models by half, and cease car production at 4 factories in Germany.
Volkswagen announced on Thursday that the “Future Plan” proposal put forth by the management board was approved at the supervisory board meeting. The plan aims to make Volkswagen Group and its brands more efficient, competitive, and better prepared for future developments.
In addition to existing plans, Volkswagen stated the need for further fundamental adjustments to its global workforce to achieve the goals of this transformation plan and ensure the group’s competitiveness.
The approved plan on Thursday provides Volkswagen Group CEO Oliver Blume with the clearest mandate yet to completely restructure Europe’s largest car manufacturer.
Since the end of 2024, Volkswagen Group’s brands have already agreed on plans to cut 50,000 positions. With the newly announced plan on Thursday, the company will cut a total of 100,000 jobs by 2030. The group currently has about 650,000 employees, with the latest decision to cut 50,000 positions accounting for approximately 8% of the group’s global workforce. The company stated that this round of job cuts includes managerial positions.
Volkswagen stated in a release, “Given the intensifying global competition, evolving demand, and technological changes in the automotive industry, aligning workforce size with economic realities is crucial.”
Meanwhile, the plan also sets the stage for Volkswagen to streamline its vehicle lineup. By 2035, the group aims to reduce the number of models by up to 50%.
As the new plan is approved, the group is striving to address the high costs, sluggish demand, and fierce competition in the automotive industry, especially from Chinese car manufacturers.
Volkswagen reported that due to the impact on sales in the Chinese market, the group’s after-tax profit in the first half of this year declined by 30%.
Volkswagen did not provide further details on the timing of this round of layoffs or how these eliminated positions will be distributed across the group’s various brands and regions.