Volkswagen approves new restructuring phase with 50,000 job cuts

Traders Union
All News
Commodities
Volkswagen cuts 50,000 more jobs

Highlights

Volkswagen plans 50,000 additional job cuts.
Total planned reductions rise to about 100,000.
The model lineup could shrink by up to 50%.
Volkswagen targets a 9% operating margin by 2030.

The supervisory board unanimously backed the restructuring plan in Wolfsburg, giving Chief Executive Oliver Blume a stronger mandate after months of internal resistance, Bloomberg reported. The additional reductions represent about 8% of Volkswagen’s global workforce at the end of last year and would bring planned cuts across group brands since late 2024 to roughly 100,000 positions.

Volkswagen targets a smaller cost base

The plan goes beyond headcount. Volkswagen intends to simplify its portfolio of businesses and assets, reduce manufacturing capacity, and cut the number of vehicle models by as much as 50% by 2035.

The changes reflect mounting pressure on a group built around a large manufacturing network and a broad range of brands and models. Volkswagen faces high operating costs, weaker demand, and increasingly aggressive competition, particularly from Chinese manufacturers that have expanded rapidly in electric vehicles.

Labor representatives had resisted factory closures, changes that could weaken worker participation in corporate decisions, and proposals to separate parts of Volkswagen’s core operations. The final agreement avoids immediate plant closures while leaving negotiations over disputed sites to the coming months.

Blume secures backing for deeper restructuring

The unanimous supervisory board approval strengthens Blume’s position as he attempts to reshape a company whose scale has become increasingly expensive to maintain.

Volkswagen is designing the business around annual sales of roughly 9 million vehicles and aims to achieve a 9% operating margin by 2030. At the same time, the automaker plans to spend about €135 billion on capital investment and research and development between 2027 and 2031.

That combination underscores the challenge: Volkswagen is cutting existing capacity while still committing heavily to future vehicles, software, and technology.

A test for Europe's largest automaker

The additional 50,000 reductions make the overhaul considerably larger than the restructuring already underway. Cutting about 100,000 positions overall while reducing the model portfolio could fundamentally change how Volkswagen operates across its global brands and factories.

Investors reacted positively to the board’s decision. Volkswagen shares rose 3.6%, while its American depositary receipts jumped 9% in New York trading on Thursday, marking their strongest gain since March 2023. The move suggested that markets viewed the broader restructuring as a meaningful effort to address the company’s cost pressures and competitiveness challenges.

We also reported Porsche bets on leaner lineup after the margin squeeze.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.