Volkswagen CEO Oliver Blume told employees on Tuesday that about half of the up to 50,000 additional global job cuts planned by the automaker would need to be implemented in Germany.
Blume outlined the measures during a series of town-hall meetings at Volkswagen’s Wolfsburg plant, emphasizing their necessity as the group’s fixed costs run roughly 30% higher than those of its peers. He stressed that the 50,000 figure was a theoretical calculation rather than a firm target, adding to existing tensions over the restructuring plan.
The announcement intensifies pressure on Germany’s auto sector, a cornerstone of Europe’s largest economy. Automakers and suppliers have already begun cutting jobs and shuttering plants in response to weak demand, elevated energy costs and rising competition from Chinese rivals. Volkswagen’s operating costs have been further strained by declining sales in China, underutilized factories and high expenses in Germany.
Blume described the transformation as the largest in the company’s history, stating that every stakeholder must contribute. Volkswagen aims to reduce annual European production capacity by an additional 500,000 vehicles, streamline management layers and sharply cut the number of models and trim variants. Sites in Emden, Hannover, Zwickau and Neckarsulm face particular pressure, with Blume noting that no competitive production allocation could be identified for these locations through the 2030s.
The company intends to finalize viable long-term plans for all its plants within the next six to twelve months, with closures framed as a last resort. Volkswagen has already secured agreements for tens of thousands of job reductions, though employees have expressed frustration that further cuts are now being demanded. Worker representatives argue that staff should not bear the cost of strategic missteps in software, electric vehicles and China strategy.
Volkswagen’s works council chair Daniela Cavallo told employees that trust in management—particularly Blume—had been damaged, though not irreparably. The IG Metall union’s Christiane Benner has criticized Blume’s cost-cutting and margin targets as unrealistic, while local union leaders have warned of potential strikes if the plans proceed.
Blume’s leadership hinges on navigating resistance from powerful employee representatives and the state of Lower Saxony, which holds veto power over key decisions. Political scientist Wolfgang Schroeder noted the plan faces numerous opponents and limited support. Pressure has also mounted from Porsche SE, Volkswagen’s majority shareholder, which has urged faster action and warned the company stands at a historic crossroads due to declining profits at both Volkswagen and Porsche AG, reducing dividend income for the Porsche and Piëch families.
Volkswagen must eliminate at least €10 billion in overhead costs to restore competitiveness, according to management. The group is also exploring alternatives such as voluntary layoffs, reduced capacities and repurposing threatened sites to avoid closures.
