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Volkswagen board approves 50,000 additional job cuts
VW CEO Oliver Blume gains stronger support to cut costs, jobs and vehicle models
Volkswagen's supervisory board has given CEO Oliver Blume his clearest mandate yet to remake Europe’s biggest carmaker. (Angel Garcia/Bloomberg)
Key Takeaways:
- Volkswagen’s supervisory board unanimously approved the Future Plan on Sept. 3, backing 50,000 additional job cuts, fewer models and a smaller industrial footprint.
- The cuts equal about 8% of VW’s workforce and double reductions agreed to since late 2024 amid high costs, weak demand and competition.
- Volkswagen will explore alternative uses for four plants while targeting a 9% operating margin by 2030 and investing 135 billion euros through 2031.
Volkswagen AG’s supervisory board backed a sweeping overhaul that calls for 50,000 additional job cuts, far fewer models and a smaller industrial footprint, giving CEO Oliver Blume his clearest mandate yet to remake Europe’s biggest carmaker.
The plan detailed Sept. 3 doubles workforce reductions agreed to across Volkswagen Group brands since late 2024 while also paving the way for the company to slim its vehicle lineup by as much as 50% by 2035. The 50,000 additional cuts represents about 8% of VW’s global employees as of the end of last year.
“Given intensifying global competition, shifting demand and technological change in the automotive industry, a consistent alignment of workforce capacity with economic reality is essential,” the company said in a statement.
The board unanimously approved the comprehensive restructuring effort known as the Future Plan at a meeting in Wolfsburg, Germany, Volkswagen said.
After months of resistance to Blume’s cost-cutting efforts, the decision gives the CEO stronger backing to push ahead with changes that management and the supervisory board said are essential to secure Volkswagen’s long-term competitiveness. The group is struggling to get a handle on high costs, weak demand and intensifying competition, particularly from Chinese automakers.
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Volkswagen headquarters and factory in Wolfsburg, Germany. (Yen Duong/Bloomberg)
The agreement stops short of immediately closing factories. VW acknowledged about 500,000 vehicles of excess annual capacity in Europe and said Emden, Hannover, Neckarsulm and Zwickau currently lack competitive follow-on production once existing models run out between 2031 and 2034. Alternative uses for the plants will now be explored, Volkswagen said.
The proposals had met fierce pushback from employee representatives and the state of Lower Saxony, which holds 20% of Volkswagen’s voting rights and two supervisory board seats. Labor leaders Christiane Benner and Daniela Cavallo said they had “prevented a dangerous escalation of the conflict,” adding that no plant had been abandoned and a proposed separation of the Volkswagen passenger car brand and components business was off the table.
The Porsche-Piëch family, which controls a majority of VW’s voting rights through Porsche SE, has pushed for faster action as returns and dividend flows come under pressure. Blume has argued that Volkswagen can no longer afford to carry the same sprawling cost base and industrial footprint while funding investments in electric vehicles, batteries and software.
The overhaul targets an operating margin of 9% by 2030 on annual sales of about 9 million vehicles. VW is also planning 135 billion euros of capital expenditure and research and development spending over 2027 through 2031, the company said.
