Volkswagen is preparing the most dramatic restructuring in its history as the German automotive giant moves to cut costs, reduce investment and reshape its global operations in response to intensifying competition from Chinese electric vehicle manufacturers.
The company is reportedly considering a reduction of up to 100,000 jobs worldwide, including around 50,000 positions in Germany by 2030, as it attempts to restore profitability after a sharp deterioration in earnings.
The planned overhaul would represent one of the biggest transformations ever undertaken by a European industrial group, with Volkswagen seeking to reduce investment by more than £112 billion over the next five years.
The measures come after the company recorded its weakest earnings performance in almost a decade, with executives facing mounting pressure from high production costs, slowing demand and the rapid expansion of Chinese electric vehicle makers.
Volkswagen’s leadership, including chief executive Oliver Blume and chief financial officer Arno Antlitz, is attempting to simplify the group’s sprawling structure and focus resources on its core automotive operations.
Four German manufacturing sites have reportedly been identified for potential closure, including facilities in Hanover, Zwickau, Emden and Audi’s Neckarsulm plant, as the company seeks to cut excess capacity.
The proposed changes have triggered opposition from employee representatives and unions.
Volkswagen’s works council and IG Metall union warned they would fight the plans, saying: “Should such plans go ahead, we would do everything in our power to prevent them.”
The crisis highlights the wider pressure facing Europe’s traditional carmakers as China’s EV industry expands aggressively into global markets with cheaper electric models and faster production cycles.
Volkswagen, which employs more than 667,000 people globally, has previously warned that its existing business model is no longer sustainable in its current form.
Germany remains the company’s largest employment base, accounting for around 43 per cent of its workforce, while its UK operations include headquarters in Milton Keynes and hundreds of direct employees alongside thousands working indirectly through its supply chain.
The restructuring comes as European manufacturers attempt to balance the enormous costs of transitioning to electric vehicles with weaker consumer demand and growing pressure from investors to improve returns.
For Volkswagen, the challenge is no longer simply competing in the next generation of cars — it is proving that one of the world’s most recognisable industrial brands can adapt quickly enough to survive it.
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