Volkswagen Group is planning to cut up to 100,000 jobs worldwide, according to a memo from chief executive Oliver Blume reported by BBC Business. The figure is twice the 50,000 cuts previously announced for German operations by 2030.
Job Cut Plans and Rationale
In a widely-reported memo to staff, Oliver Blume said the Group's costs were 20% higher compared to rival businesses, and it would need to reduce its outgoings even further. He referred to a "theoretical deduction" of 50,000 jobs worldwide, but the current assessment across all brands, companies, and regions suggests up to 100,000 jobs may be eliminated, according to Blume. "We are currently assessing across all brands, companies and regions how many adjustments are actually necessary and feasible," he said. "We need to become more efficient, more robust and simpler. We must reduce our costs."
| Metric | Previous Target | New Target |
|---|---|---|
| Job cuts (global) | 50,000 (Germany only by 2030) | Up to 100,000 (worldwide) |
| Cost disadvantage vs. rivals | Not specified | 20% higher |
The group includes the Volkswagen brand along with Porsche, Audi, Seat and Skoda. The cuts would affect all brands and regions.
Financial Performance and Market Challenges
Volkswagen's profits have fallen sharply in recent years. According to BBC Business, operating profit dropped from €22.6bn ($25.8bn) in 2023 to €19.1bn in 2024, and then to just €8.9bn last year (presumably 2025). The decline is attributed to falling sales in key markets.
- In China, once one of VW's most lucrative markets, sales fell 26% in the first six months of the year compared to the previous year.
- In the US, sales fell more than 7%, partly due to tariffs on car imports introduced by the Trump administration.
Chinese brands have been moving aggressively into international markets, introducing new technologies while benefiting from lower production costs, adding pressure on established automakers to control costs and slashing profit margins.
Factory Closures and Union Response
Four German factories previously threatened with closure remain at risk. Blume said the company had been "unable to confirm" alternative uses for these plants. The factories are located in Zwickau and Emden (used for electric car production), as well as Hanover and Neckarsulm. They are seen as expensive to run, according to the BBC.
In late 2024, after threats of mass strikes, VW reached an agreement with the German trade union IG Metall to cut 35,000 jobs at its namesake brand by 2030 in a "socially responsible manner", with another 15,000 jobs to go at its other brands. The current plans appear to go much further.
Last week saw widespread protests at Volkswagen sites across Germany ahead of a meeting of VW's supervisory board, which includes labour representatives as well as company managers.
Production Timeline and Industry Implications
Some industry analysts suggested to Agence France Presse that Volkswagen had deliberately publicised the number of 100,000 as a negotiating tactic, and that the final figure of cuts is likely to be lower, according to BBC Business. The cuts are expected to be implemented across all brands, companies, and regions, though the timeline and specific locations remain under assessment.
For industrial executives and supply chain managers, the scale of the planned cuts signals potential disruptions in production capacity, particularly at the German EV plants in Zwickau and Emden. The job reductions, combined with falling sales in China and the US, may affect VW's ability to maintain output levels and could lead to further restructuring across its global supply chain. VW's need to reduce costs by 20% relative to competitors underscores the competitive pressure from Chinese brands and the impact of tariff policy on manufacturing operations.
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