Historic restructuring at Volkswagen could include 100,000 layoffs and closure of four manufacturing units
Volkswagen, the German automotive giant, is planning the biggest restructuring in its history, with the possibility of cutting up to 100,000 jobs and closing four of its factories in Germany. The information, coming from sources familiar with the matter, points to a scenario of profound changes within the automaker.
Members of the company’s supervisory board were informed about these comprehensive plans. Detailed discussions are expected to take place at a meeting scheduled for July 9, at a time of intense competitive pressure from Chinese rivals in the global market.
The closure of the plants in Hanover, Zwickau, Emden and the Audi factory in Neckarsulm would put more than 45,000 jobs at risk. This number would add to the 50,000 personnel cuts already negotiated with unions by the end of 2024, highlighting the magnitude of the measure.
Oliver Blume, Volkswagen’s CEO for nearly four years, presented the proposals to the company’s senior executives earlier this week. The intention is to align leadership around significant cuts that will certainly face strong resistance from unions and the state of Lower Saxony, the carmaker’s second largest shareholder.
The first news about this strategic reformulation was released by Manager Magazin magazine.
The second largest car manufacturer in the world also intends to reduce its planned investments by around 15%, totaling just over 130 billion euros (equivalent to 148 billion dollars) over the next five years, according to information from the same magazine.
Blume, together with financial director Arno Antlitz, aims to fundamentally restructure the company, which is 89 years old. This would include separating the core Volkswagen brand and parts operations into separate corporate entities, the publication revealed, citing its sources.
Need for profound changes is highlighted by Volkswagen
A Volkswagen spokesperson chose not to comment on “confidential documents” related to the plans.
“The entire group, including its brands and subsidiaries, needs to undergo profound transformations,” said the spokesperson, signaling the seriousness of the company’s internal situation.
Volkswagen’s works council and the influential German union IG Metall have already declared that they will resist any such measures. In a joint statement released on Friday, they said: “Should these plans move forward, we will do everything in our power to stop them.”
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Porsche SE, an investment vehicle for the Porsche and Piech families and majority shareholder of Volkswagen, refused to comment on the matter.
In financial year 2025, the Volkswagen Group’s global workforce totaled 667,164 people, with approximately 43% of this total employed in Germany.
Volkswagen shares were trading at 16-year lows on Friday morning, down 0.4% at around 10:24 GMT, indicating some skepticism among investors about the success of the restructuring plan.
Pressure from Chinese rivals drives major transformations in the sector
Oliver Blume faces a monumental challenge to turn around Volkswagen as it grapples with trade tariffs, a costly transition to electric vehicles and growing and fierce competition from Chinese automakers seen as its biggest current threat.
Large car manufacturers have progressively lost ground to electric vehicles produced locally in China. Data from AlixPartners shows that the market share of non-Chinese automakers in the Asian country fell from 57% in 2020 to 32% in 2025.
In the competitive Chinese market, Volkswagen, which for years was the main car manufacturer, was surpassed by BYD in 2024 and fell to third place, behind Geely, in 2025. This loss of leadership in the world’s largest automotive market is one of the direct catalysts for the urgency of restructuring and the radicality of the measures proposed by the German automaker, which seeks to adapt to a rapidly changing global scenario.
This downturn in the Chinese market has already extended to premium automakers like BMW, which last week issued a surprising profit warning, placing some of the blame on weak sales in China.
Chinese automakers, in addition to dominating their domestic market, are expanding their presence to emerging markets and growing rapidly in Volkswagen’s traditional territory in Europe.
According to data from ACEA, automakers such as BYD, Chery, SAIC and Leapmotor doubled their combined share of the European market through May, compared with the previous year, with dozens of other Chinese companies launching or planning to launch their products in Europe soon.
Volkswagen, in more recent years, has seen its market share decrease considerably in China, its main sales hub, losing first place to BYD in 2024 and falling back to third place, behind Geely, in 2025.
