Akshay DidwaniyaEurope’s largest automaker, Volkswagen, is reportedly doubling its job-cut target to nearly 1,00,000 roles and now plans to shut four German production plants as CEO Oliver Blume pushes through the company’s biggest-ever restructuring.
A Bombshell Plan That Could Reshape an Automaking Giant
Volkswagen Europe’s biggest car manufacturer is reportedly planning to slash up to 1,00,000 jobs worldwide. That is nearly one in every six of its 6,57,000 employees globally. German business publication Manager Magazin broke the story on Friday, citing insiders with direct knowledge of the plan.
The job-cut target would effectively double what VW had already announced a plan to eliminate 50,000 positions in Germany by the end of 2030. The new figures, if confirmed, would mark the single largest workforce reduction in the company’s 89-year history.
Four Factories in the Firing Line
Beyond the job cuts, the report paints an even bleaker picture for Germany’s industrial heartland. Volkswagen is planning to shut down four production facilities VW plants in Hanover, Zwickau and Emden, along with Audi’s facility in Neckarsulm, Baden-Württemberg.
The closures would not happen overnight. Production at each site would wind down as the current car models built there reach the end of their lifecycle. The Zwickau plant, for instance, currently builds the ID.3, ID.4 and likely-to-be-discontinued ID.5 for VW along with the Audi Q4 e-tron and the Cupra Born for partner brands.
This would follow the earlier shutdown of VW’s Dresden factory and Audi’s Brussels plant suggesting a clear pattern of factory closures across the group.
Blume’s Bold Restructuring Blueprint
CEO Oliver Blume has already presented the plan to the management board. He is set to table it formally before the supervisory board on July 9. The overhaul internally referred to as VW’s “Group Target Picture” for 2030 goes far beyond headcount reductions.
According to the report, Blume and Chief Financial Officer Arno Antlitz want to spin off both the core VW brand and the company’s components division as independent entities. This would fundamentally alter the way the Volkswagen Group is structured separating the iconic nameplate from its sprawling parent group for the first time.
The plan also includes slashing the group’s five-year investment budget by roughly 15%, bringing it down to just over €130 billion, or approximately $148 billion. Overhead costs are targeted for an additional €11 billion in savings by 2030.
Crisis Piling on Crisis: The Numbers Are Grim
This plan is not arriving out of nowhere. In the first quarter of 2026, VW’s net profit collapsed by 28% falling to €1.56 billion while revenue slipped 2% to €75.7 billion. CFO Arno Antlitz was unusually blunt about the situation: “The cost savings planned so far are not enough. If we fail to do this, we are putting our future at risk.”
US tariffs are currently costing the group around €4 billion a year in additional expenses. At the same time, VW’s sales in China its single most important market fell by a sharp 20% in the first quarter. Chinese rivals such as BYD are eating into VW’s market share both inside China and increasingly across European showrooms.
Globally, Chinese carmakers now account for almost one in every ten new vehicles sold across Europe, according to European car industry body ACEA. At VW’s annual meeting just last week, Blume told shareholders: “Never has the risk situation been so high.”
Unions Fire Back Hard
The announcement has already triggered fierce pushback from Germany’s powerful labour movement. VW’s works council head Daniella Cavallo, IG Metall union president Christiane Benner, and Lower Saxony union chief Thorsten Groeger issued a sharp joint statement in response.
“Should such plans be pursued, we would oppose them with all our might,” the three said together. “What really matters is something else entirely: instead of engaging in blind, knee-jerk reactions, the management board should finally do its job.”
The unions carry real weight at VW. Together with state politicians from Lower Saxony which holds a significant stake in Volkswagen labour representatives hold a blocking majority on the supervisory board. Past restructuring proposals at VW have routinely been softened following tough negotiations with workers’ representatives.
Volkswagen currently has a job security agreement running until the end of 2030. Audi’s equivalent agreement extends even further until the end of 2033. Exactly how the company could legally implement such sweeping cuts under existing collective bargaining law remains deeply unclear.
VW Declines to Confirm: But Doesn’t Deny
A Volkswagen spokesperson declined to comment on what the company called “confidential documents.” The spokesperson said: “The relevant facts of the matter will be discussed and approved by the relevant bodies. We will not pre-empt this process.”
However, the company’s broader tone was telling. “The entire group, including its brands and subsidiaries, must undergo far-reaching change,” the spokesperson added words that clearly signal the scale of upheaval Volkswagen is bracing for.
VW’s shares were largely steady in mid-morning Frankfurt trading actually outperforming Germany’s blue-chip DAX index, which was itself down 1.1% on the day.
Golf Goes to Mexico: The Wider Picture
The factory closures would build on a shift already underway inside Volkswagen. The company is moving production of the iconic Golf its most famous model out of Germany entirely. Assembly of the Golf will shift from VW’s Wolfsburg headquarters to Puebla, Mexico, starting in 2027.
The recent sale of VW’s marine engine unit Everllence to US private equity firm Bain Capital generating proceeds of €7.4 billion signals Blume’s wider intent to strip back the group and focus tightly on its core automotive business.
With around 43% of VW’s global workforce based in Germany, the proposed 1,00,000 job cuts would amount to roughly 15% of the total global headcount a staggering number that would send shockwaves through Germany’s industrial and political landscape alike.
Mayur Mohta
The BRICS Times
