- Volkswagen says up to 100,000 jobs could ultimately be cut as part of its restructuring programme.
- The company has already announced plans to halve its model range and reduce annual vehicle production.
- CEO Oliver Blume says Volkswagen must cut costs by 20 per cent to remain competitive.
Volkswagen has widened its cost-cutting plans, with chief executive Oliver Blume signalling that up to 100,000 jobs could eventually be eliminated as the German carmaker pushes ahead with what it describes as the biggest restructuring in its history.
The latest warning comes just days after Volkswagen announced plans to halve its model range, focusing on its best-selling and most profitable vehicles. Together, the measures form part of a broader strategy to reduce costs, simplify operations and respond to weaker global demand, particularly in China.
Blume reportedly told employees that the overhaul represented "the most comprehensive realignment in the company's history", built around dozens of initiatives designed to make Volkswagen leaner and more competitive.
A bigger reset takes shape
Volkswagen had already agreed to reduce 50,000 jobs through voluntary redundancies and phased retirements. Around 37,000 positions have already been eliminated under that programme.
However, Blume reportedly told staff that if labour costs remain unchanged, a further 50,000 jobs could theoretically be removed worldwide because the company's overheads are around 20 per cent higher than those of its competitors.
He also confirmed that uncertainty remains over the future of four German factories in Emden, Hanover, Zwickau and Neckarsulm. While the supervisory board rejected proposals to close the plants outright, Blume reportedly said alternative uses for the sites are still being explored.
The chief executive added that "smart solutions are always better than closing a plant", but warned Germany could no longer ignore global overcapacity in the car industry.
Volkswagen plans to reduce annual production from around 12 million vehicles before the pandemic to 9 million, after already cutting output by around 2 million vehicles over the past two years. Production in China is also expected to fall by another 500,000 vehicles as competition from domestic manufacturers intensifies.
Pressure continues to build
The restructuring follows a difficult period for Europe's largest carmaker.
Volkswagen's operating profit has fallen sharply over recent years as sales weakened in key markets. In China, one of its most important markets, first-half sales reportedly declined by 26 per cent, while sales in the US also fell by more than 7 per cent, partly because of higher import tariffs.
Blume reportedly said Volkswagen must become "more efficient, more robust and simpler", adding that reducing overhead costs and streamlining product ranges were essential for the company's long-term future.
The proposals have already triggered protests at Volkswagen plants across Germany, with labour representatives continuing discussions over the scale of the restructuring.
Industry analysts have suggested the figure of 100,000 job cuts could represent a negotiating position rather than a final target, although Volkswagen has not confirmed how many additional roles will ultimately be eliminated.
