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Volkswagen CEO Signals 50,000 More Job Cuts Possible to Address Cost Disadvantage
Volkswagen's CEO, Oliver Blume, has indicated that the automotive giant may need to eliminate an additional 50,000 jobs worldwide to remain competitive. The potential cuts were outlined in an internal memo to staff, confirming for the first time that the company is evaluating a total workforce reduction of up to 100,000 positions.
Sweeping Restructuring Plan Emerges
The memo, seen by Reuters, states that Volkswagen has a calculated 20% cost disadvantage compared to its key competitors. To address this gap, Blume wrote that a "theoretical deduction" of another 50,000 jobs is needed on top of 50,000 cuts already agreed upon across the group, which includes its Porsche and Audi subsidiaries.
"We are currently assessing across all brands, companies and regions how many adjustments are actually necessary and feasible," Blume said in the document. The communication follows mounting pressure on the CEO to streamline the company amid slumping profits, high tariff costs, and fierce competition in China.
Labor Tensions and Factory Futures
AdThe disclosure comes after labor representatives on Volkswagen's supervisory board reportedly blocked restructuring proposals presented by Blume last week. Sources familiar with the matter said the plans included job cuts and the potential closure of four factories.
In the memo, Blume acknowledged the uncertainty surrounding several German manufacturing sites, stating the company could not yet confirm competitive plans for the following plants into the 2030s:
- Emden
- Hanover
- Zwickau
- Neckarsulm
Blume added that he preferred "intelligent solutions" to outright closures, having previously suggested options such as shifting underutilized factories to defense manufacturing or producing Chinese Volkswagen models in Europe.