Volkswagen plans to cut up to 100,000 jobs globally
Volkswagen Group Chief Executive Oliver Blume has confirmed that the automaker is considering cutting as many as 100,000 jobs globally, doubling the previously announced target as the company seeks to reduce costs and improve competitiveness.
The German automotive giant, which owns brands including Volkswagen, Audi, Porsche, Seat and Skoda, had earlier announced plans to eliminate about 50,000 jobs in Germany by 2030. However, the latest proposal could significantly expand the scale of the workforce reduction.
In a memo to employees, Blume said the group’s operating costs are about 20% higher than those of its competitors, making further cost-cutting measures necessary. He noted that the company is reviewing all its brands, subsidiaries and regional operations to determine the extent of the adjustments required.
“We need to become more efficient, more resilient and simpler. We must reduce our costs,” Blume said, adding that the company has yet to identify viable alternative uses for four German factories previously earmarked for possible closure.
The facilities in Zwickau and Emden, which manufacture electric vehicles, along with plants in Hanover and Neckarsulm, are among those considered expensive to operate.
Volkswagen has experienced a sharp decline in profitability in recent years. Operating profit fell from €22.6 billion in 2023 to €19.1 billion in 2024, before dropping further to €8.9 billion last year.
The company has also struggled with declining sales in key international markets. Vehicle sales in China, once one of Volkswagen’s strongest markets, fell by 26% during the first half of the year, while sales in the United States declined by more than 7%, partly due to tariffs on imported vehicles introduced by the Trump administration.
At the same time, Chinese automakers have intensified competition in global markets by offering advanced technologies at lower production costs, increasing pressure on established European manufacturers and squeezing profit margins.
In late 2024, Volkswagen reached an agreement with German trade union IG Metall to cut 35,000 jobs at the Volkswagen brand by 2030 through what it described as a socially responsible process, with an additional 15,000 positions to be eliminated across its other brands.
The latest proposal goes well beyond those earlier plans and has already sparked concern among workers. Last week, employees staged protests at several Volkswagen facilities ahead of a supervisory board meeting involving company executives and labour representatives.
Some industry analysts told Agence France-Presse that the announcement of up to 100,000 potential job cuts could be part of a negotiating strategy, suggesting the final number of layoffs may ultimately be lower.
Source: BBC
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