Volkswagen Considers 100,000 job cuts and Plant Closures

Volkswagen faces a proposal to eliminate 100,000 positions and shutter four German production sites in what would mark the most extensive reduction in the carmaker's 89-year operating history. According to Manager Magazin, the cuts would remove roughly 15% of a 657,400-strong workforce and double the 50,000 reductions already agreed for Germany by 2030.

The company faces pressure from Chinese competitors, US import tariffs and weakening demand across Europe. Presenting first-quarter results earlier this year, in which net profit fell 28% to €1.56bn (US$1.78bn), Chief Financial Officer Arno Antlitz addressed the situation directly.

"The cost savings planned so far are not enough," Arno says. "If we fail to do this, we are putting our future at risk."

Sales decline in China

The core challenge for Volkswagen centres on weakening sales performance, particularly in China. The group held the position of top-selling carmaker in China for years before BYD moved it to second place in 2024 and third in 2025.

According to AlixPartners, non-Chinese carmakers watched their share of the Chinese market collapse to 32% in 2025, from 57% in 2020. The impact has extended to premium brands, with BMW issuing a profit warning last week attributed partly to China.

Some shareholders question whether cost reduction alone can address the underlying business challenge. "The high costs are merely a symptom, not the cause," Ingo Speich of Volkswagen investor Deka says.

"VW must bring attractive products to market that are in high demand."

Four facilities marked for closure

Volkswagen Chief Executive Oliver Blume presented the restructuring plan, including 100,000 job cuts and four plant closures, to senior managers last week ahead of a supervisory board meeting in June.

Four sites are marked for closure, home between them to more than 45,000 jobs:

• Hanover, the commercial vehicles hub that builds the ID. Buzz electric van
• Zwickau, the eastern German plant previously positioned as a symbol of the firm's electric future
• Emden, the coastal Lower Saxony site retooled for electric and passenger models
• Neckarsulm, the historic home of premium brand Audi

The restructuring plan would reduce planned investment by about 15%, to just more than €130bn (US$148.2bn) over the next five years. Volkswagen had already committed to cuts and new model releases to lift profits. The company's shares have slid more than 25% in 2026.

Workforce holds leverage over plans

In late 2024, Volkswagen promised its unions no forced redundancies and no German closures before 2030, with Audi shielded to 2033. The plan on the table would overturn both commitments.

The workforce holds leverage to block the proposal. Co-determination rules give employee representatives half the seats on the supervisory board that must approve any restructuring. Lower Saxony, the second-largest shareholder, rarely votes against local jobs.

Resistance has already begun. "If such plans were to be pushed forward, we would prevent them with all our might," the General Works Council and IG Metall warns in a joint statement.

On 9 July, all parties will learn whether a 2024 promise can outlast the business reality of 2026. The scale of proposed cuts recalls General Motors, which shed tens of thousands of jobs around its 2009 bankruptcy and 74,000 more across the early 1990s as it shut or idled 21 plants.