German media says plan would be double the existing job-cut target

Unions, politicians push back sharply

Lower Saxony government's veto power looms as key variable

Employees attend a works council briefing at Volkswagen's factory in Zwickau, eastern Germany, on Oct. 28, 2024. German media reported that Volkswagen is considering cutting tens of thousands more jobs worldwide and closing up to four factories in Germany. [AFP]
Employees attend a works council briefing at Volkswagen's factory in Zwickau, eastern Germany, on Oct. 28, 2024. German media reported that Volkswagen is considering cutting tens of thousands more jobs worldwide and closing up to four factories in Germany. [AFP]

Volkswagen Group is considering cutting up to 100,000 jobs and closing four additional factories in Germany, local media reported, as the automaker faces mounting pressure to restructure amid a delayed electric vehicle transition and weak sales in China.

German business magazine Manager Magazin reported Friday, citing internal sources, that Volkswagen is pursuing a plan to reduce roughly 100,000 of its 657,000 jobs worldwide within a few years.

The restructuring plan reportedly includes the possible closure of Volkswagen factories in Hanover, Zwickau and Emden, as well as an Audi factory in Neckarsulm. If the plant closures and mass layoffs go ahead, the impact on Germany's broader automotive industry would be substantial.

Volkswagen Group CEO Oliver Blume put forward the proposal ahead of a board meeting scheduled for early next month, according to the report. A Volkswagen spokesperson declined to comment on internal confidential documents but acknowledged that "the entire automotive industry and Volkswagen Group are in a profoundly fundamental period of transformation."

Volkswagen has been operating under emergency management since 2024, after profitability deteriorated due to sluggish sales in its largest market, China, and underwhelming results from its electric vehicle push.

Earlier, Volkswagen had drawn up a restructuring plan to cut 35,000 jobs in Germany by 2030 and halt assembly operations at its Osnabrück and Dresden factories. More recently, the group set a broader job-cut target of 50,000, with the departure of 28,000 employees already confirmed.

Manager Magazin described the latest proposal as "an unprecedented scale — double the existing target." Management concluded that the earlier restructuring alone would not be enough to reduce costs and restore competitiveness.

Labor and political leaders pushed back immediately. The German metalworkers' union IG Metall said it would "fight with everything it has" to block any such plan.

Adis Ahmetovic, a lawmaker from the Social Democratic Party, criticized the company's leadership, saying it "seems to want to make its presence felt mainly through layoff announcements." He added that if the reports were accurate, the plan amounted to "a frontal attack and a clear provocation."

Volkswagen's ownership structure adds another layer of uncertainty. The state government of Lower Saxony, where the company is headquartered, holds a 20 percent stake, making it the second-largest shareholder — a position that gives it veto power over major decisions, including large-scale restructuring.

Lower Saxony Prime Minister Olaf Lies of the Social Democratic Party proposed in April a joint production arrangement under which Chinese automakers' vehicles would be manufactured at local Volkswagen factories to preserve jobs and production capacity in Germany. As restructuring pressure intensifies, the tension between maintaining domestic employment and cutting costs is expected to grow sharper.


kwater@heraldcorp.com