Volkswagen CEO Oliver Blume has warned the company could eliminate as many as 50,000 additional roles worldwide as part of a broad cost-reduction and competitiveness program. The move would be on top of a similar-sized workforce reduction announced in 2024 and follows an internal review that found Volkswagen’s overhead roughly 20% higher than key rivals.
In an intranet message reported by Bloomberg, Blume said reaching cost parity with competitors implies a “theoretical” reduction of about 50,000 positions. He described group headcount as having expanded for decades to levels that are no longer sustainable, and noted that market shifts and external factors are causing multibillion-euro headwinds.
The proposed measures have already stirred opposition from labor representatives and did not secure immediate backing from the supervisory board. Reports say the company is weighing a range of options, including the possible closure of up to four German plants — Emden, Hanover, Zwickau and Neckarsulm — although Blume said there are “smarter options” than outright factory shutdowns to address excess costs and falling demand. He also pointed to an average 20% improvement in German factory costs over the past year.
Volkswagen employs more than 657,000 people globally and is confronting problems shared by other European carmakers: weak demand in China amid a protracted property downturn, U.S. tariffs that squeeze margins at premium brands such as Audi and Porsche, and a sluggish European market. Those factors, combined with relatively high fixed costs and underused production capacity, have intensified pressure to restructure.
Blume has argued that the traditional business model of developing and exporting cars from Germany is no longer viable. As part of reshaping the company, Volkswagen recently sold a 51% stake in its ship engine unit Everllence, raising about €7.4 billion. The group also plans to review its sprawling portfolio — more than 2,000 stakes and businesses including Ducati and an investment in U.S. solid-state battery developer QuantumScape — to determine which assets support the core automotive operations and deliver acceptable returns.
The company faces the challenge of balancing significant cost cuts with maintaining production flexibility and securing employee and board support. Any final decisions on headcount and site allocations will play a major role in Volkswagen’s efforts to restore competitiveness and adapt to shifting global markets.