Volkswagen reportedly wants to cut 100,000 jobs, around 15% of its workforce, and close German plants. It would be the biggest overhaul in the automaker’s history, and unions vow to fight.
The European car industry is shrinking and its biggest name is leading the retreat. Volkswagen reportedly plans to cut around 100,000 jobs at its German plants, about 15% of its global workforce. If this happens, it would be the most profound reform in the company’s 89-year history.
The figure comes from the German company title. Manager Magazine. He reported that CEO Oliver Blume wants cuts in the coming years to make Europe’s largest carmaker competitive again. Volkswagen did not confirm the details, citing confidential internal documents.
However, the company did not deny the address. “The entire Group, including its brands and subsidiaries, must undergo profound changes,” said a spokesperson CNBC. This is the closest thing to a confirmation of intent that an automaker offers before negotiations begin.
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Scale is what makes this different. Volkswagen employs hundreds of thousands of people around the world, and a 15% cut would fall mainly in Germany, its industrial heartland. The reductions would occur over several years and not all at once. Still, a number like 100,000 reframes what a downturn looks like for a national champion.
Factories on the list
The report names specific sites. Volkswagen would reportedly suspend production in Hannover, Zwickau and Emden, in addition to the Audi plant in Neckarsulm. For a company that has made cars in Germany for generations, closing plants at home is almost unthinkable. Now it’s on the table.
Zwickau is the one that hurts the most. Volkswagen recently converted the Saxony plant to manufacture electric cars, six electric vehicle models from the VW, Audi and Cupra brands. It was meant to be the future. Instead, it has suffered repeated production pauses, which the company attributes to weak demand for electric vehicles.
The bet on electric vehicles that went sour
This is the crux of the problem. volkswagen strong commitment to electricityand the demand has not come fast enough. European sales of electric vehicles have stagnated and the company has already cut production. Factories built for an electric boom are now running below capacity.
The moment hurt. Germany eliminated its electric vehicle subsidies for consumers at the end of 2023 and sales cooled just as Volkswagen finished retooling for electric vehicles. The company braced itself for a surge that the policy later helped stop. That mismatch is exactly what now manifests itself as inactive plants and surplus personnel.
Cheaper Chinese rivals have increased the pressure. They sell electric cars in Europe at prices that Volkswagen struggles to match. Add in U.S. tariffs under President Trump and the math gets worse. Making these cars in Germany costs more than many buyers will pay.
Blume’s speech is direct about the cost. He maintains that the company’s plants and payroll were sized for a market that no longer exists. The goal, he says, is a more efficient Volkswagen that can survive a decade of cheaper competition. Unions read the same numbers and come to a very different conclusion.
Volkswagen is not alone in this situation. Tesla and VW have been the The most popular enemies of the electric vehicle industryand both now face a market that is maturing and becoming more aggressive. The era of easy electric growth is over for everyone.
An agreement under pressure
There is a promise at risk here too. Volkswagen had already planned 50,000 job cuts earlier this year. blaming Trump’s tariffs and the drop in Chinese sales. Their unions accepted those losses in a deal at the end of 2024, with one condition. The company would not make deeper cuts or close plants before 2030.
This new plan surpasses that. Doubling the cuts and closing factories breaks the spirit, if not the letter, of the agreement. The unions reacted exactly as expected.
“If such plans were to go ahead, we would prevent them with all our strength,” the IG Metall union and the General Works Council said in a joint statement. In Germany, where unions hold positions on the supervisory board, that is no idle threat.
Politics raises the stakes even higher. The state of Lower Saxony owns a large stake in Volkswagen and holds seats on its board of directors. That gives regional politicians a direct voice and a compelling reason to protect local jobs. A plan of this magnitude becomes a national argument, not just a corporate one.
Why it matters beyond VW
Volkswagen is a benchmark. It is Europe’s largest car manufacturer and one of its largest private employers. When you eliminate 100,000 jobs, the impact affects suppliers, cities and an entire industrial model built around the German automobile.
The industry as a whole is already cutting back white collar staff. Newer players aren’t sure either, with Rivian cutting roles as the US EV market shrinks. The pain is spreading among both inherited giants and upstarts.
Volkswagen’s own pivot tells the story. You have invested money in software and even taken a participation in Rivian to fix your technology. None of that changes the basic link: too much manufacturing capacity, too few buyers, and rivals building for less.
The open question
For now this is a report, not a signed plan, and the fight has only just begun. Volkswagen has to negotiate with some of the most powerful unions in Europe. The figure of 100,000 can be both an opening position and a target.
The deeper question is whether Europe can continue making cars at the scale and cost it once did. Volkswagen spent 89 years proving it could do it. The question that this reform leaves open is whether it can do so for another decade, with many fewer workers.
