Volkswagen’s CEO has announced an additional 50,000 job cuts for staff as the company faces increasing cost pressures
Volkswagen may need to eliminate around 50,000 additional jobs to remain competitive with rivals in a rapidly intensifying automotive market, its CEO informed employees in an internal memo, effectively acknowledging for the first time that the company is considering a reduction of up to 100,000 positions.
CEO Oliver Blume is working to optimize Europe’s largest car manufacturer, which has seen a decline in profits as it confronts billions of euros in tariff expenses, intense competition in China, and the need for greater efficiency within its German manufacturing operations.
After previously agreeing to 50,000 job cuts across the group, including its Porsche and Audi subsidiaries, the company must focus on further cost reductions, having determined a cost disadvantage of 20% compared to similar companies, Blume stated in the memo reviewed by Reuters.
This indicates a “theoretical deduction” of an additional 50,000 jobs globally, according to the memo. “We are presently evaluating across all brands, companies, and regions the extent of adjustments that are genuinely necessary and viable,” Blume stated in the document. ‘INTELLIGENT SOLUTIONS’ ARE PREFERRED TO PLANT CLOSURES.
The company had earlier chosen not to respond to reports regarding the potential for up to 100,000 job losses.
The memo comes in response to frustrated calls from employees urging management to clarify its restructuring plans, which Blume presented to the company’s supervisory board on Thursday.
Sources familiar with the matter indicated that labor representatives on the committee opposed the proposals, which reportedly included job cuts and the potential closure of four factories. “As of today, we still cannot confirm competitive use cases for the plants of Emden, Hanover, Zwickau, and Neckarsulm in the 2030s,” Blume stated in the memo.
He expressed a preference for “intelligent solutions” rather than closures, previously highlighting the defense industry or the production of Chinese Volkswagen models in Europe as viable options for underutilized factories.
Volkswagen did not address any potential job cuts or plant closures in its statement after the discussions with key stakeholders on Thursday.
Instead, the company announced plans to further reduce its production capacity and gradually halve its extensive line-up of models — measures that analysts indicated did not adequately address Volkswagen’s current challenges.
It’s completely reasonable that not every detail has been finalized at this stage, and that some matters require additional discussion and assessment,” Blume conveyed in his message to employees. More meetings will undoubtedly take place as we strive to identify the most effective solutions.
