Volkswagen Group is considering a sweeping structural overhaul that could result in up to 100,000 job cuts and the closure of four manufacturing facilities in Germany, according to reports by Reuters. The proposed consolidation follows escalating pressure on established European automakers by Chinese competitors.
The restructuring roadmap, which was initially disclosed by Manager Magazin, was presented by CEO Oliver Blume to senior leadership earlier in the week. The supervisory board has been briefed on the details, and a formal review of the strategy is scheduled for a meeting on July 9, 2026. Under the current proposals, the manufacturer is evaluating the closure of plants in Emden, Hanover, and Zwickau, alongside Audi's Neckarsulm site. Shutting down these locations would directly jeopardize more than 45,000 positions, compounding a separate reduction of 50,000 jobs previously negotiated with labor representatives in late 2024.
Beyond operational downsizing, the corporate strategy led by Blume and Chief Financial Officer Arno Antlitz aims to fundamentally reconfigure the internal corporate hierarchy. The plan includes scaling back planned capital expenditure by approximately 15 percent to just over €130 billion over the next five years, Reuters noted. Furthermore, corporate planners are exploring spinning off the core VW passenger vehicle brand and its dedicated component manufacturing divisions into independent corporate entities. A Volkswagen spokesperson declined to comment directly, but stated that the entire group, including its subsidiaries, must undergo far-reaching change to ensure future viability.
The proposed measures are expected to face substantial resistance from organized labor and regional political authorities. In a joint statement released on Friday, Germany’s IG Metall union and the company's central works council pledged to use all available mechanisms to block the site closures and headcount reductions. Any final restructuring will also require alignment with the state of Lower Saxony, which holds a influential position as the company's second-largest shareholder.
The urgency behind the restructuring stems from a sharp contraction in Volkswagen’s performance within its core Chinese business landscape. Market data from AlixPartners underscores the broader trend, showing that non-Chinese automakers saw their cumulative market share in China tumble to 32 percent in 2025, down from 57 percent in 2020. After maintaining the top sales spot in China for several decades, Volkswagen slid to second place behind BYD in 2024, and dropped to third place behind Geely in 2025. Concurrently, Chinese EV brands are expanding footprints across Europe, with registrations from manufacturers such as BYD, Chery, Leapmotor, and SAIC doubling their regional market share through May compared to the prior year.