Volkswagen, Britain's best-selling car brand, is considering cutting 100,000 jobs worldwide as part of a massive restructuring. The redundancies would affect the Volkswagen Group, the world's second-largest automotive company, which owns brands including VW, Audi, Bentley, Porsche, Seat, and Skoda. VW alone was the UK's best-selling car brand last year, with Audi, Skoda, and Seat also ranking in the top 20.
Plans presented to executives
The job-cut proposals were presented to top executives by CEO Oliver Blume earlier this week. Blume had already begun cutting 50,000 roles in 2024, and is reported to have said another 50,000 jobs may need to be axed to make ends meet. If the plans go ahead, they would lead to the closure of four factories in Germany.
"The entire group, including its brands and subsidiaries, must undergo far-reaching change," a VW spokesperson told Reuters. Leaked memos suggest the company's costs are roughly 20 per cent higher than rival brands. Prestigious European brands have also suffered due to the rise in sales of electric vehicles produced in China.
Opposition from unions and shareholders
However, the shake-up, which includes spinning off some VW group brands into their own separate entities, has been vehemently opposed. Trade unions and the state of Lower Saxony, VW's home region and its second-largest shareholder, have been vociferous in their criticism. Union members staged demonstrations at 18 VW sites last Friday (July 10) after the plans were leaked.
Christiane Benner, chair of the company's largest trade union, IG Metall, told The Guardian: "Instead of taking this achievement as a model, the board is confronting employees with new downsizing plans. Understandably, the resulting anger and uncertainty are immense. We need new ideas and concepts for utilising plant capacity, sensible considerations from the company."
It is not yet known when the plans will be announced publicly, or when they would come into effect for staff. The existing job-cut programme has led to 37,000 redundancies already, while some of the factories eyed for closure were set to halt production in the 2030s.
