Volkswagen’s overhead expenses run more than 30% above those of comparable automakers, Chief Executive Oliver Blume said in an internal memo viewed by Reuters. Current profit margins of less than 4% are insufficient to fund long-term investments in new technologies and facilities, he added.
The company is preparing for a restructuring that could involve up to 50,000 additional job cuts globally, Blume noted. The figure serves as a benchmark for the scale of action required rather than a fixed target, he said. Volkswagen’s supervisory board is scheduled to meet on September 4 to continue deliberations on the turnaround plan.
Blume described the situation as "more than critical," acknowledging that current margins are solid relative to the broader market but inadequate for Volkswagen’s strategic needs. The company has already outlined plans to reduce its model lineup and trim capacity, unveiled in July.
Four German plants—Emden, Hannover, Zwickau, and Neckarsulm—are not expected to reach competitive capacity utilization in the 2030s, though no decisions have been made on potential closures. Blume emphasized that the company remains open to all options as discussions progress.
Weakening profits in China and the United States, intensified competition in Europe, and punitive import tariffs have compounded Volkswagen’s challenges. The company’s cost structure and market positioning remain under scrutiny as it seeks to align with industry benchmarks.
