Volkswagen is considering shutting four German factories and ramping up job cuts to as many as 100,000. (File Photo)
Volkswagen is considering cutting up to 100,000 jobs and shutting four factories in Germany, a restructuring that would become the largest workforce reduction in automotive industry history if approved, Reuters reported, citing the people familiar with the matter.
Members of VW’s supervisory board have been informed of the plans, which are due to be discussed at a board meeting on July 9, the report added.
The restructuring highlights the mounting pressure on Europe’s biggest carmaker from Chinese electric vehicle makers, weakening demand in Europe and US tariffs. The outcome could reshape Germany’s manufacturing sector and the global auto industry.
Up to 100,000 jobs at risk
Closing plants at Hanover, Zwickau, Emden and Audi’s Neckarsulm site would put more than 45,000 jobs at risk, on top of the 50,000 cuts already planned, bringing the total to as many as 100,000 positions.
In absolute terms, the move would surpass even General Motors’ sweeping restructuring during its 2009 bankruptcy, and the early 1990s when GM cut up to 74,000 jobs over four years and shut or idled 21 plants.
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Volkswagen’s global workforce stood at 667,164 in its 2025 financial year, with nearly 43% employed in Germany.
Chinese rivals, weak demand squeeze Volkswagen
The carmaker is under mounting pressure from multiple directions, surging Chinese rivals eating into its market share, stiff US tariffs on car imports, and shrinking demand across Europe, which the company has said makes its current business model unsustainable.
Having dominated China for years, Volkswagen was overtaken by BYD in 2024 and fell to third place behind Geely in 2025. Across Europe, Chinese automakers including BYD, Chery, SAIC and Leapmotor doubled their combined market share through May this year, according to the European Automobile Manufacturers Association.
“The VW Group has suffered from years of neglect in readjusting workforce numbers due to the stranglehold the regional government and trade unions have on the company,” independent auto analyst Matthias Schmidt told Reuters. “The market reality is hitting the German giant hardest.”
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CEO bets on biggest overhaul in VW history
Chief Executive Oliver Blume presented the restructuring plans to senior executives earlier this week, seeking support for cuts that are almost certain to face fierce resistance from unions and the state of Lower Saxony, VW’s second-largest shareholder.
The overhaul, first reported by Manager Magazin, would also see investment cut by around 15% to just over €130 billion roughly $148 million over the next five years. Blume and Chief Financial Officer Arno Antlitz are also considering spinning off the core VW brand and parts operations into separate entities, the magazine reported.
Volkswagen shares fell 3.4% to 16-year lows on Friday, signalling investor scepticism about whether the plan can succeed.
“The high costs are merely a symptom, not the cause,” said Ingo Speich of VW shareholder Deka. “VW must bring attractive products to market that are in high demand, that would put an end to the debate over costs.”
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Who is pushing back?
VW’s works council and Germany’s powerful IG Metall union wasted no time in signalling opposition. In a joint statement on Friday, they said they would do everything in their power to prevent such plans from going ahead.
The premier of Lower Saxony also said the state would not agree to the proposal.
It is not the first time Blume has attempted deep cuts. A push to close plants in Germany in 2024 was abandoned after triggering strikes and a prolonged standoff with unions and the works council, which holds significant influence over company decisions.
A Volkswagen spokesperson declined to comment on what it called confidential documents, but acknowledged the scale of change required.
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“The entire group, including its brands and subsidiaries, must undergo far-reaching change,” the spokesperson said.
The restructuring proposals will now go before Volkswagen’s supervisory board on July 9. If approved, the plans are expected to trigger a confrontation with Germany’s powerful unions and Lower Saxony’s government, potentially setting up one of the biggest labour battles in the company’s history.
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