Volkswagen Plans Historic Overhaul: Cut 100,000 Jobs, Shut 4 German Plants, and Spin Off Core Brands

Volkswagen Group is planning a major restructuring that includes cutting up to 100,000 jobs and closing three Volkswagen plants in Hanover, Zwickau, and Emden in Germany, as well as an Audi plant in Neckarsulm. These factories will cease operations once the current vehicle models they produce reach the end of their lifecycles. Additionally, the Volkswagen brand and its components manufacturing business will be separated from the existing structure and consolidated into independent entities. The plan forms part of CEO Oliver Blume’s “Group Target Image 2030” strategy, which aims to reduce the group’s investment by approximately 15% over the next five years—to just above €130 billion—and cut €11 billion in administrative and operational costs by 2030. As of the end of the first quarter this year, Volkswagen Group employed 657,389 people globally, including 279,698 in Germany. Blume has already presented the proposal to the group’s executive board and plans to submit it to the supervisory board for approval on July 9. A Volkswagen spokesperson declined to comment on specific details, stating only that the matter would be discussed through the company’s governance procedures and emphasizing the need for deep structural transformation across the entire group. The announcement has drawn strong opposition from labor unions. Volkswagen’s Works Council and Germany’s metalworkers’ union IG Metall issued a joint statement saying the measures have caused anxiety among employees and local communities and pledged to resist them fully. Given that employee representatives hold half of the seats on Volkswagen’s supervisory board and the state government of Lower Saxony—which holds a significant stake in the company—typically sides with the unions, management faces substantial resistance in pushing through these reforms. Following the news, Volkswagen’s share price fell 3.4% on June 26, hitting a 16-year low.