Volkswagen CEO Warns 50,000 More Job Cuts May Be Needed to Close Competitive Gap

Volkswagen's CEO, Oliver Blume, has informed staff that the automaker may need to cut an additional 50,000 jobs to remain competitive with its rivals. The warning, delivered in an internal memo seen by Reuters, effectively confirms for the first time that the company is considering a total workforce reduction of up to 100,000 positions.

Restructuring to Address Cost Disadvantage

The potential new cuts come on top of 50,000 job reductions already agreed upon across the Volkswagen Group, which includes its Porsche and Audi subsidiaries. According to the memo, the company has calculated a 20% cost disadvantage compared to similar automakers, necessitating further significant cost-saving measures.

Blume described the additional 50,000 positions as a "theoretical deduction" needed to close this competitive gap. "We are currently assessing across all brands, companies and regions how many adjustments are actually necessary and feasible," he stated in the document.

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Labor Opposition and Factory Futures

The communication follows a supervisory board meeting last Thursday where Blume presented his restructuring plans. Sources familiar with the matter reported that labor representatives on the committee blocked the proposals, which were said to include the job cuts and the potential closure of four factories.

In the memo, Blume specifically addressed the uncertainty surrounding several German plants. He noted that as of today, the company "still cannot confirm competitive use cases for the plants of Emden, Hanover, Zwickau and Neckarsulm in the 2030s." However, he expressed a preference for "intelligent solutions" over outright closures, suggesting options like producing for the defense industry or manufacturing Chinese Volkswagen models in Europe to utilize factory capacity.