Volkswagen plans to slash 50,000 jobs amid dire need to reduce costs
The new cuts announced on Sep 3 bring total reductions to around 100,000
On September 3, Volkswagen announced plans to drastically reduce its workforce by 50,000 jobs, bringing the total layoffs to roughly 100,000 since 2024. The German automotive giant's CEO, Oliver Blume, described the restructuring as the most significant in its 89-year history, driven by competition from China, high energy prices, and the costly transition to electric vehicles.
The decision, made after a meeting of the supervisory board, followed negotiations with unions representing over 650,000 employees worldwide. Despite initial resistance, labor leaders ultimately supported the plan, stating that the executive board now has the foundation to address major challenges. Volkswagen has already reduced its workforce by 50,000 by the end of the decade, with agreements reached with 37,000 employees.
The company, once a symbol of European industry, now faces challenges as China leads the global automobile market. Sales in China have declined, while cheap Chinese cars have affected German factories. The fate of four German factories remains uncertain, though the company believes these plants may not be needed beyond 2030. Volkswagen aims to lower costs, which are currently about 30% higher than industry peers, with potential solutions including converting factories for defense use.
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