Volkswagen to Cut Another 50,000 Jobs and May Close Four Plants in Germany

Volkswagen's supervisory board has approved the next stage of the group's sweeping restructuring: over the coming years, the company will cut a further 50,000 jobs. Back in 2023, unions had already agreed to eliminate the same number of positions, meaning the total number of job cuts will reach 100,000.

Unions and the government of Lower Saxony — which holds a stake in Volkswagen and has a say in company decisions — had long opposed such drastic measures. However, CEO Oliver Blume has repeatedly warned that the current situation is unsustainable. According to him, Donald Trump's tariff policy, the situation in China, and rising fuel prices mean the company needs additional cost-saving measures — and these should primarily affect Germany, where wages and production costs are notably higher than at the group's other plants.

In the end, management's plan was approved unanimously, although the board meeting was unexpectedly moved up by a day. Employee representative on the board Daniela Cavallo said that "a plan for the future is necessary to successfully guide the group through the next decade," stressing that employees will only thrive if the company itself thrives.

Layoffs as a last resort

Rather than resorting to direct layoffs, Volkswagen intends to offer employees voluntary departure options — early retirement or generous severance packages. Management also plans to reduce the number of managerial positions at headquarters. The possible closure of four German plants — in Emden, Zwickau, Hanover and Neckarsulm — has not been ruled out either, as the company says their prospects for the next decade are "not guaranteed."

Still, company management insists that closing plants remains the very last option, since compensation payments and possible write-downs would cost the company billions. Alternative uses for these sites are currently being explored.

Production in Germany becomes unprofitable

The world's second-largest carmaker is suffering not only from high costs at its German plants but also from declining profits in the Chinese and American markets. The group employs more than 650,000 people worldwide, of whom around 280,000 are in Germany, where many plants are operating inefficiently.

According to management data, producing a single car at the group's plants in other European countries, including Czechia, costs an average of €2,832, compared with €6,490 in Germany. Had Volkswagen continued operating as before, annual losses would have amounted to the equivalent of roughly 36 billion crowns.

A significant reduction in the model lineup is also expected to boost efficiency — the group plans to keep only about half of its current models and cut back on optional equipment choices. Some production is set to move from Germany to other countries: according to available information, the next generation of the VW ID.4 electric vehicle, which will be renamed the ID.Tiguan, may be built not in Emden, Germany, but at the plant in Mladá Boleslav, Czechia.

Although the cuts will primarily hit Germany, they will ultimately affect the entire group. The Czech brand Škoda occupies a special position compared to the group's other marques, thanks to strong sales and margins. The fate of the Spanish brand Seat, however, may look quite different — its future has long been in doubt amid the rise of Cupra, which split off from Seat in 2018. According to some reports, the cost-cutting programme could even include the complete phase-out of the Seat brand in favour of Cupra, though Volkswagen has not officially confirmed this.

Source: seznamzpravy.cz