Volkswagen is preparing a sweeping restructuring that could put as many as 100,000 jobs at risk, as Europe’s largest carmaker confronts mounting pressure from Chinese competitors, high production costs and a fundamental shift in the global automotive market.
Chief executive Oliver Blume is expected to address workers at Volkswagen’s Wolfsburg headquarters as the company begins laying out plans to reduce its workforce and overhaul production patterns.
The scale of the potential cuts, reported by Bloomberg, would represent one of the most dramatic restructurings in Volkswagen’s history and underline the depth of the challenge facing Germany’s industrial base.
Daniela Cavallo, Volkswagen’s labour leader, warned that confidence in Mr Blume’s leadership had been damaged, although she stopped short of declaring the relationship beyond repair.
“Our trust in this company’s executive board, and especially in its CEO Oliver Blume, has been damaged. Not yet beyond repair, but damaged nonetheless,” she told workers at the Wolfsburg plant.
The intervention came after an employee-wide survey highlighted widespread anger over what workers described as Volkswagen’s “disastrous” communication about its future.
The dispute comes as the company weighs the future of several German factories. Volkswagen has previously warned that some plants may struggle to become profitable during the 2030s, with facilities in Emden, Hannover, Zwickau and Neckarsulm among those facing uncertainty.
The company is also understood to be discussing potential uses for its Osnabrück plant with defence contractors.
Volkswagen’s financial performance has provided little comfort despite signs of improvement. The group’s Brand Group Core, comprising its volume brands, reported an operating result of €3.61 billion (£3.09 billion) in the first half of 2026, up 4.5 per cent from the same period a year earlier.
Its operating margin nevertheless remained only 4.9 per cent.
Thomas Schäfer, Volkswagen brand chief, said geopolitical instability and “far-reaching market upheavals” continued to weigh on the business.
“Clear responsibilities, slimmer management bodies and optimised cooperation in the fields of production, procurement and development,” he said.
“We know that the global challenges will continue to grow – we can therefore only be successful through consistent cooperation and leveraging synergies.”
Mr Blume has reportedly described Volkswagen’s position as “more than critical”, an unusually stark assessment from the company’s chief executive.
The underlying problem extends beyond Germany. Volkswagen is being squeezed by Chinese manufacturers that have expanded rapidly in electric vehicles while European carmakers grapple with higher labour, energy and regulatory costs.
In Europe, the Volkswagen Group — including Volkswagen, Audi, Skoda, Seat, Cupra and Porsche — accounted for 26.5 per cent of vehicle sales in the first half of the year, retaining its position as the region’s largest automotive group despite declining sales compared with 2025.
The Volkswagen brand itself remains Britain’s best-selling car marque, with more than 104,000 registrations so far this year and more than 8 per cent of the market.
But even there, momentum is weakening. UK Volkswagen registrations are down 3.16 per cent year on year, while BMW is closing the gap.
The figures illustrate the dilemma confronting Mr Blume: Volkswagen remains a dominant global manufacturer, but its scale is increasingly becoming a burden rather than an advantage.
A workforce reduction potentially reaching 100,000 employees would amount to a brutal attempt to bring the company’s cost base into line with a market that is changing faster than its traditional manufacturing model can adapt.
For Volkswagen’s workers, the immediate question is whether the restructuring can stop at efficiency measures — or whether it ultimately means German factories and tens of thousands of jobs are sacrificed to keep the group competitive.
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