Volkswagen Group is reportedly planning to cut up to 100,000 jobs and reduce or cease production at several plants, according to German media reports. The drastic measures would double previously announced staff reductions and signal a deepening crisis at Europe's largest automaker.
Scope of Cuts
The proposed cuts, which could be scaled back, involve closing four German factories in the medium term, including an Audi plant in Neckarsulm and VW facilities in Hanover, Zwickau and Emden. The job reductions would affect approximately 15% of Volkswagen's global workforce of over 650,000 employees across brands including Audi, Bentley, Skoda, Seat and Cupra.
Reasons Behind the Restructuring
Volkswagen has been hit hard by growing competition from Chinese rivals and the challenging transition from combustion engines to electric vehicles. A company spokesperson stated: "It is correct that the entire automotive industry and the Volkswagen Group are undergoing a profound transformation. The executive board has repeatedly stated that our current business model no longer works across all brands: developing cars in Germany, producing them in Europe and exporting them to the world. The world has fundamentally changed in recent years."
The spokesperson also cited tariffs, competition and "stagnating, sometimes declining" markets that create "burdens on the company reaching tens of billions of euros per year."
CEO's Cost-Cutting Strategy
According to Manager Magazin, CEO Oliver Blume's deepening overhaul will be discussed at a supervisory board meeting next month. Blume has already announced a strategy to cut €11 billion (£9.49 billion) in costs. The new proposals go significantly further than the reductions announced in 2024.
Competitive Landscape in China
Volkswagen has made some headway in China, reclaiming car sales dominance in the first two months of 2026, when Toyota also regained ground, both overtaking local electric vehicle champion BYD amid fading subsidies for greener cars. However, BYD's boss recently stated the company aims to become the world's largest auto company within five years, targeting Toyota's long-held crown.
Data from the China Passenger Car Association shows VW's joint ventures with FAW and SAIC held a combined 13.9% share of the country's passenger vehicle market, followed by Geely's 13.8% and a combined 7.8% from Toyota's joint ventures with GAC and FAW.
Company Response
A Volkswagen spokesperson declined to comment on the specific reports, saying the company would not "pre-empt the process" involving staff and unions. They added: "The entire group, including brands and subsidiaries, have to transform profoundly."
