Volkswagen’s leadership is warning that the company may need to cut an extra 50,000 jobs to address a 20% cost disadvantage compared to competitors, as outlined in an internal memo.
The memo, reviewed by Reuters, underscores the necessity for “intelligent solutions” rather than facility closures. CEO Oliver Blume emphasized evaluating adjustments across brands, regions, and operations to determine feasible reductions.
Previously, Volkswagen announced 50,000 job cuts across its subsidiaries, including Porsche and Audi. The latest assessment suggests a potential total of 100,000 reductions, confirming reports of escalating restructuring efforts.
Blume stated that underutilized factories could pivot to defense production or manufacturing Chinese models in Europe, reflecting long-term strategic shifts.
The automaker faces mounting pressure from labor representatives, who opposed proposals involving layoffs or plant closures. Volkswagen responded by announcing reduced production capacity and plans to halve its model lineup to streamline operations.
This follows a recall of nearly 50,000 vehicles due to an engine fire risk linked to faulty wiring, further complicating the company’s financial and operational challenges.
Analysts note that higher tariffs, competitive pressures in China, and inefficiencies in German manufacturing have contributed to declining profits, necessitating drastic measures to realign with market demands.
