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The German automaker’s supervisory board gave unanimous backing to Chief Executive Oliver Blume’s restructuring programme during a meeting in Wolfsburg, according to a company statement issued after the gathering. The latest reductions, which include management positions, come on top of an earlier plan for 50,000 cuts announced in late 2024 and already partially implemented, Bloomberg reported. Volkswagen, which employed more than 650,000 people worldwide at the end of last year, described the programme as the most extensive transformation in its 89-year history.
The restructuring addresses excess production capacity of more than 500,000 vehicles across its European factories and aims to restore competitiveness against low-cost Chinese electric vehicle makers, Reuters data shows. Declining sales in China, US tariffs and the expensive transition to battery-powered models have pressured margins at the group whose brands include Audi, Porsche and Skoda. A fundamental adjustment of global workforce capability is essential to secure the company’s future, Volkswagen said in its announcement.
The plan envisages halving the model range by 2035 to focus on higher-volume vehicles that deliver better economies of scale and lower fixed costs, the carmaker stated. Options for four German plants at Emden, Zwickau, Hanover and Neckarsulm, where production is set to run out in the early 2030s, are being assessed for alternative uses without immediate closures, according to the statement. Labour representatives secured commitments that no factory would be abandoned outright and that further talks would seek to preserve as many roles as possible.
IG Metall union official Christiane Benner said labour leaders had backed the agreement after intense negotiations that averted a dangerous escalation between management, workers and the state of Lower Saxony. “In this crisis situation, we fought hard for good solutions,” Benner stated. “The executive board now has the foundation to tackle the major tasks ahead.”
Blume welcomed the unanimous approval from the supervisory board, calling it a strong signal for the future of the Volkswagen Group while emphasising responsibility toward its workforce and partners. Capital expenditure and research and development spending will be reduced by about 16 percent to 135 billion euros for the period from 2027 through 2031, a figure cited across multiple reports including from The Irish Times. The overhaul targets an operating margin of 9 percent by 2030 on annual sales around 9 million vehicles together with flatter hierarchies and a simpler corporate structure.
Volkswagen shares rose as much as 5.8 percent in early Frankfurt trading on Friday as investors welcomed the clarity on cost savings, CNBC market coverage indicated. Analysts described the deal as a breakthrough that exceeded expectations after months of scepticism about whether unions and the regional government would agree to such deep changes, Reuters noted. The measures build on warnings issued earlier this year that up to 100,000 positions could ultimately be at risk without urgent action to address structural challenges.
