Volkswagen plans 100,000 job cuts and closure of four German plants in deepest overhaul in its 89-year history

A radical restructuring plan

Volkswagen is considering slashing up to 100,000 jobs worldwide and shutting four German production sites as part of a deep turnaround plan dubbed "Zielbild 2030". The sites on the list for medium-term closure are the VW plants in Hanover, Zwickau and Emden, plus the Audi factory in Neckarsulm. The plan, first reported by Manager Magazin on June 26, would mark the largest upheaval in the company's 89-year history, doubling the 50,000 job cuts already announced this spring. The board reviewed the proposal last Wednesday, and a decisive supervisory board meeting is set for July 9.

Financial strain and shrinking capacity

The drastic measures follow a rough 2025, when Volkswagen's net profit fell by almost half and operating margin shrank to 2.8% from 5.9% a year earlier. Revenue dipped 0.9% to EUR 322 billion, while operating profit plunged 53.4% to EUR 8.9 billion. CEO Oliver Blume told Manager Magazin that the company now aims to permanently reduce annual production capacity from over 12 million vehicles to 9 million, with one million already cut in China and another million to be eliminated in Europe by 2028.

Surplus production capacity is not economically viable for our company in the long term.

Breaking a hard-won labour pact

The proposals openly collide with a 2024 agreement with the powerful IG Metall union that guaranteed no German plant closures until 2030. The workforce in Germany numbered around 287,000 at the end of 2025 out of a global total of 667,164. In a joint statement, the VW works council and IG Metall warned: "If these plans were to be implemented, we will do everything in our power to prevent it." A company spokesman declined to confirm the details but acknowledged that the whole group, including brands and subsidiaries, must undergo far-reaching changes.

External pressures pile up

Volkswagen's leadership points to a transformed competitive landscape. A spokesman told AFP that the traditional model of designing cars in Germany, building them in Europe and exporting worldwide no longer works for all brands, citing tariffs, sharper competition and adverse market trends. In China, where VW led for years, it was overtaken by BYD in 2024 and slipped to third place behind Geely in 2025; the share of non-Chinese brands shrank from 57% in 2020 to 32% in 2025, according to AlixPartners. Chinese marques such as BYD, Chery, SAIC and Leapmotor doubled their combined EU market share in a single year.

Next steps and political fallout

Alongside job cuts, Blume and CFO Arno Antlitz want to spin off the core Volkswagen brand and the parts unit into separate legal entities, and slash the five-year investment budget by about 15% to just over EUR 130 billion. The supervisory board will vote on the package on July 9, with the outcome set to ripple far beyond Wolfsburg. With the stock trading at around EUR 76 on Friday, a level not seen in years, the decision will be a pivotal moment for the entire European auto industry.