Volkswagen Group's supervisory board unanimously approved a sweeping restructuring plan on the 3rd that centers on cutting about 50,000 jobs, the German automaker said. The decision comes two months after reports in July that the company was considering eliminating up to 100,000 positions and closing four plants in Germany, which drew strong opposition from labor representatives. Reuters described the move as the most far-reaching restructuring in Volkswagen's 89-year history.
Volkswagen Chief Executive Oliver Blume said the plan sends a strong signal for the group's future and pledged that the company would meet its responsibilities to employees, suppliers and industrial jobs worldwide.
The supervisory board said European production capacity exceeds demand by more than 500,000 vehicles and that securing output volumes for the Emden, Zwickau, Hanover and Neckarsulm plants between 2031 and 2034 would be difficult. The company plans to discontinue about half of its entire model lineup by 2035 and to cut the number of specification and option combinations per vehicle by roughly 75% over the same period to simplify production. It also set financial targets of a 9% operating margin in 2030 and investment of 135 billion euros (about 212 trillion won) from next year through 2031.
The board said about 50,000 positions across the group, including management, are expected to be adjusted. In 2024, management and labor agreed to cut 50,000 jobs by 2030 in exchange for a commitment not to close any German plants through the end of the decade. In July, however, management submitted to the supervisory board a proposal to consider 100,000 job cuts and four plant closures, effectively reversing that agreement, drawing opposition from labor representatives who hold voting seats on the board and from the government of Lower Saxony.
The works council, which represents employees, said the figure of 50,000 is not a fixed target but a planning assumption derived by working backward from the financial goal of a 9% operating margin in 2030. It stressed that compulsory layoffs remain barred through the end of 2030 under the existing agreement.
Daniela Cavallo, head of the works council, said the future plan represents the steps needed to lead the group to success without shifting the burden onto employees alone. Lower Saxony Premier Olaf Lies said that given global competition, it is all the more important to move forward together on the necessary transition, adding that policymakers must support the effort by putting the right frameworks in place.
Bloomberg said the absence of immediate plant closures, reduced labor participation in management and a spinoff of core businesses from the plan was the key reason labor did not oppose it.
Volkswagen has seen its earnings hit by intensifying competition from Chinese rivals, tariff pressure from the United States and weak sales in Europe. Sales volume in the first half of this year fell 8.4% from a year earlier, while operating profit dropped 11.6%.
