Volkswagen is reportedly considering one of the most significant restructurings in its 89-year history, with plans that could eliminate up to 100,000 jobs and close four manufacturing plants. The proposed measures come as the automaker struggles with sluggish demand in Europe, mounting competition from Chinese electric vehicle makers, and the impact of US tariffs.
According to Reuters, members of Volkswagen’s supervisory board have been informed about proposals that include shutting factories in Hanover, Zwickau, Emden, and Audi’s Neckarsulm plant. The restructuring plans are expected to be discussed in detail during a supervisory board meeting scheduled for July 9.
If approved, the proposed factory closures could put more than 45,000 jobs at risk. Combined with around 50,000 workforce reductions already agreed upon with labour unions in late 2024, Volkswagen’s total job cuts could approach 100,000, marking one of the largest restructuring efforts ever undertaken by a global automaker.
The company is also considering significant cost-cutting measures, including a reported 15% reduction in planned investments over the next five years, which would lower total capital spending to just over €130 billion. The proposed overhaul was first reported by Manager Magazin.
Chief Executive Oliver Blume is leading the proposed restructuring, having presented the case for deeper reforms to senior executives this week. Chief Financial Officer Arno Antlitz is also reportedly backing the plan to simplify Volkswagen’s operations and revamp its corporate structure. The proposals are said to include exploring the separation of the core Volkswagen brand and its parts business into independent entities.
What Is Putting Volkswagen Under Pressure?
Volkswagen is being squeezed on multiple fronts at once. Chinese automakers have eroded its position in both domestic and global markets, while demand in Europe has weakened and tariffs have raised costs in the United States.
Once the top-selling carmaker in China, Volkswagen was overtaken by BYD in 2024 and has since slipped further down the rankings as domestic rivals expand aggressively. Industry estimates cited by AlixPartners show non-Chinese brands’ share in China falling sharply from 57 percent in 2020 to about 32 percent in 2025.
The pressure is no longer limited to China. Companies such as BYD, Chery, SAIC and Leapmotor have doubled their combined share in Europe over the past year, intensifying competition in Volkswagen’s home region.
Volkswagen’s own leadership has warned that its current business model is under strain, with rising costs and sluggish sales undermining profitability.
Shareholders Prepare for a Showdown
The proposed restructuring is expected to face strong opposition from labour unions and regional stakeholders. Volkswagen’s works council and Germany’s IG Metall union have already said they will resist any large-scale factory closures, pledging to use every available means to prevent the plans from being implemented.
The proposal is also unlikely to receive support from the state of Lower Saxony, one of Volkswagen’s largest shareholders, which has signalled its opposition to the planned restructuring.
A Volkswagen spokesperson declined to comment on what the company described as confidential documents but said the automaker as a whole must undergo significant transformation to address the challenges it faces.
Porsche SE, the investment company controlled by the Porsche and Piëch families and Volkswagen’s largest shareholder, also declined to comment on the reported proposals.
Market Reaction and Internal Resistance
Volkswagen’s shares have been hovering near their lowest levels in 16 years, highlighting investor concerns over whether the proposed restructuring will be enough to restore the company’s performance. Deka shareholder Ingo Speich said the company’s challenges stem from weak sales rather than high costs alone, arguing that improving its product lineup is essential to addressing the root of the problem.
Blume’s previous effort in 2024 to shut factories in Germany sparked widespread strikes and a lengthy dispute with labour unions before the plan was scaled back. The episode highlighted the significant political and union resistance that any major restructuring is likely to face.
Worldwide Industry Trends
The scale of the proposed restructuring has drawn comparisons with some of the auto industry’s biggest shake-ups, including General Motors’ bankruptcy-led overhaul in 2009 and major workforce reductions carried out during the 1990s.
Volkswagen employed more than 667,000 people worldwide in 2025, with nearly 43% of its workforce based in Germany. As a result, any large-scale job cuts would have significant economic and social consequences extending well beyond the company.