Volkswagen says cutting 100,000 jobs by end of decade

Volkswagen has announced plans to cut 100,000 jobs by the end of the decade, marking the largest restructuring in the global automotive industry. This includes 50,000 previously agreed cuts, and an additional 50,000 jobs to be reduced. The German car giant stated that this decision is a result of aligning workforce levels with economic realities, due to US tariffs, uncertain electric car demand, and fierce competition, particularly from China.

Volkswagen, which operates under brands like Audi and Porsche, cited the potential closures of four German plants in Hannover, Emden, Zwickau, and Neckarsulm as contributing factors. These closures would mark the first time the company has shut down full-scale factories in its home country. Martin Lehmann, a worker at the Zwickau plant since 2012, expressed concern over the impact on the region's economy.

The approval of the job cuts plan by Volkswagen's supervisory board, composed of labor and shareholder representatives, signifies progress in negotiations between the two parties. The CEO, Oliver Blume, emphasized the significance of the decision for the future of the Volkswagen Group. However, the agreement was not without controversy.

Unions accused the company of not being transparent with workers about the extent of the potential job cuts, which was initially reported by a business weekly before being confirmed internally.

In response to the negotiations, the supervisory board has requested the executive board to develop a model for an evolved decision-making and group structure, with approval thresholds adjusted to align with standard practice. This move could potentially dilute the influence of unions on the board, as two-thirds of the board must approve plant closures, a statute often interpreted as giving labor blocking powers.