Volkswagen Group said Thursday that its supervisory board had approved a sweeping transformation plan that could remove about 50,000 jobs, including management positions, as Europe's largest automaker tries to cut costs and stay competitive.
Too many factories, too few sales
The company said its German plants can build about 500,000 more vehicles a year than the market needs. Employment in Germany has already dropped from about 275,000 workers in 2023 to 254,000 as of June 30. Volkswagen did not identify specific job cuts or factory closings, and it gave no timeline for the workforce reduction or details on how it would be divided across brands.
Fewer models, lower targets
As part of the overhaul, Volkswagen plans to cut roughly half of its vehicle lineup and has slashed its annual production targets. The group owns the Volkswagen, Audi, Porsche and Lamborghini brands, and a company statement said a further adjustment to global staffing was needed on top of existing programs to meet the goals of the transformation.
Why the pressure is building
Chinese automakers are expanding aggressively in Europe, and tariffs on Volkswagen's shipments to the United States have raised costs. The company has been battling its powerful German unions for years over wages and plant capacity, and its supervisory board approved the plan unanimously. Analysts say the move shows how quickly the global auto industry is being reshaped by Chinese competition and the shift to electric vehicles, and they expect other European manufacturers to announce similar cutbacks in coming months.