Volkswagen board approves plan to cut another 50,000 jobs

Volkswagen’s board has approved a sweeping workforce reduction that will see roughly 50,000 positions eliminated across the group by the end of the decade, a move announced by chief executive Oliver Blume on Thursday. The cuts will affect all brands under the Volkswagen umbrella—including Audi, Porsche, Skoda, Seat, Bentley and Lamborghini—and will encompass management roles as well as production staff. Blume framed the plan as a “strong signal” that the automaker is taking responsibility for its entire workforce while positioning the company for future competitiveness. In parallel, the group disclosed that by 2035 it intends to halve the number of vehicle models it produces and simplify its product range by 75%, concentrating on the most compelling vehicles and increasing production volumes per model to lower costs.

The restructuring is driven by a sharp decline in profits caused by falling sales in key markets and intensifying competition, particularly from Chinese manufacturers that benefit from lower production costs and rapid technology rollout. Volkswagen’s earnings have been squeezed by reduced demand in China—once its largest market—and in the United States, where tariffs introduced during the Trump administration have further dampened sales. The competitive pressure from firms such as BYD, which have surged in the UK, EU and Southeast Asia, underscores the urgency of the overhaul. As a result, the company is also reviewing the future of several plants—Emden, Zwickau, Hanover and Neckarsulm—where capacity now exceeds demand, exploring alternative uses for these facilities.

The plan represents the most extensive restructuring in Volkswagen’s near‑nine‑decade history, affecting a workforce that will still number over 660,000 by 2025. Christianne Benner, president of the IG Metall union and deputy chair of VW’s supervisory board, acknowledged that the carmaker has “fought hard for good solutions” to address what she described as a “crisis situation.” The cuts aim to safeguard the group’s competitiveness amid shifting consumer demand and rapid technological change, while the broader German auto industry grapples with a systemic downturn. The outcome of the plant assessments and the implementation of the workforce reduction will shape Volkswagen’s ability to streamline operations, reduce complexity, and regain profitability in an increasingly crowded global market.

⚡ Effects Interpreter