Volkswagen to Cut 50,000 More Jobs and Reduce Car Models

German automaker Volkswagen Group is initiating a large-scale restructuring by cutting an additional 50,000 jobs and reducing the number of its car models by about half. This strategy aims to significantly overhaul its cost structure to boost profitability amid intensifying competition with Chinese companies, tariffs imposed by the United States, and sluggish sales in the European market.

Reuters Yonhap News

On September 3 (local time), the Volkswagen Supervisory Board unanimously approved the management's proposed 'Future Plan 2030.'

Volkswagen stated, "The Supervisory Board determined that production capacity within Europe exceeds current demand by more than 500,000 units, and that it will be difficult for the Emden, Zwickau, Hannover, and Neckarsulm plants to secure competitive production volumes sequentially from 2031 to 2034." The company added, "Alternative uses for these plants are also being considered."

The company continued, "By 2035, we plan to streamline our model portfolio by about 50% and reduce product configuration complexity by approximately 75%." Its strategy is to strengthen economies of scale by increasing production per model and lowering costs through selection and concentration.

In addition, Volkswagen plans to cut a further 50,000 jobs. This reduction comes on top of the 50,000 jobs already cut since 2024, accounting for approximately 8% of the company’s global workforce as of the end of last year. Volkswagen explained, "To remain competitive, it is fundamentally necessary to further adjust the global workforce. According to the analysis underlying the 'Future Plan 2030,' a reduction of about 50,000 employees, including management, is needed across the group."

Volkswagen's goal for this restructuring is to maintain annual sales of approximately 9 million units while raising its operating margin to 9% by 2030. The company also plans to invest a total of 135 billion euros in capital expenditures and research and development (R&D) from 2027 to 2031.

Volkswagen is experiencing difficulties due to intensifying competition with Chinese firms, tariffs from the United States, and continued sluggish sales in the European market following the COVID-19 pandemic. In the first half of this year, vehicle sales dropped by 8.4% compared to the same period the previous year, and operating profit also declined by 11.6%.

This content was produced with the assistance of AI translation services.