Volkswagen shake-up: 100,000 jobs on the chopping block as Audi, Porsche maker eyes shuttering factories

Volkswagen is preparing for what could become one of the most significant restructurings in its history, with reports suggesting the German automotive giant is considering eliminating up to 100,000 jobs and closing several manufacturing sites as it attempts to restore competitiveness in an increasingly difficult global market.

According to a report by Manager Magazin, Chief Executive Oliver Blume outlined an expanded transformation strategy during a management board meeting earlier this week. The proposals, which are expected to be presented to Volkswagen's supervisory board next month, would significantly deepen the cost-cutting measures already underway across the group.

The reported plans come as the owner of Volkswagen, Audi and Porsche navigates a challenging business environment marked by slowing demand, geopolitical uncertainty and growing competition from established and emerging rivals.

Volkswagen layoffs

If approved, the latest proposals would represent a major escalation of Volkswagen's existing efficiency programme. The company had previously announced plans to reduce its workforce by around 50,000 employees by 2030. The new blueprint, however, could increase that figure to as many as 100,000 job reductions, according to Manager Magazin.

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Volkswagen currently employs roughly 657,000 people worldwide, making it one of Europe's largest private employers.

The restructuring reportedly extends beyond workforce reductions. The company is also examining ways to lower administrative and overhead expenses by €11 billion by the end of the decade while reshaping its manufacturing footprint in Germany.

Among the facilities reportedly under review are an Audi factory in Neckarsulm and Volkswagen plants in Hanover, Zwickau and Emden. The report also said management is evaluating structural changes that could involve separating some component operations and even reorganising the core Volkswagen passenger car brand in an effort to improve efficiency and profitability.

Responding to the report, a Volkswagen spokesperson stopped short of confirming the details but acknowledged that the company is working on an extensive transformation strategy.

"Volkswagen must undergo profound change," the spokesperson said, adding that the executive board "has been working intensively over the past few months on a future-oriented plan to realign the company."

Mounting challenges and expected resistance

The reported restructuring reflects the growing pressures facing Europe's biggest carmaker. Volkswagen has been grappling with a combination of external and internal challenges, including US tariffs, continued weakness in the Chinese market and fierce competition in Europe from manufacturers such as BYD and Stellantis.

Blume has already begun reshaping parts of the business. Earlier this year, Volkswagen sold a 51 per cent stake in its Everllence marine-engine business to strengthen its finances. The company has also secured agreements from approximately 28,000 employees to leave as part of its previously announced workforce reduction programme.

Manufacturing capacity has likewise been adjusted. Volkswagen has reduced its annual production capability from around 12 million vehicles to approximately 9 million, reflecting lower demand and a shift towards a leaner operating model.

Despite these moves, any attempt to accelerate job cuts or shut factories is expected to face significant political and labour opposition.

Representatives of Volkswagen's works council and Germany's powerful IG Metall union reacted swiftly to the reported proposals, warning that such measures would create uncertainty for employees and the communities that depend on the company's operations.

"They unsettle our workforce and the regions where we operate," the organisations said in a joint statement. "Should such plans be pursued, we would oppose them with all our might."

Securing approval for any large-scale restructuring will not be straightforward. Labour representatives occupy half the seats on Volkswagen's supervisory board, giving them substantial influence over major strategic decisions. The German state of Lower Saxony, another key shareholder that has historically aligned itself with labour interests, also holds two seats on the board, making any far-reaching reforms subject to intense scrutiny and negotiation.

With the supervisory board expected to discuss the proposals next month, Volkswagen's efforts to reshape its future now appear set for a crucial test, balancing financial realities against the interests of its workforce and one of Germany's most influential industrial employers.