Volkswagen board backs plan to cut 50,000 jobs and shut four German plants
Volkswagen's board approved a restructuring program that will eliminate about 50,000 positions, halve its model range and cease production at four factories as it seeks to improve competitiveness.
Volkswagen's board of directors approved a restructuring plan that will cut roughly 50,000 jobs, reduce the company's model portfolio by about half and end vehicle production at four German plants in Emden, Zwickau, Hanover and Neckarsulm. The measures are intended to address excess capacity of around 500,000 vehicles in Europe and to improve cost efficiency amid competitive pressure from low-cost Chinese manufacturers and U.S. tariff impacts.
CEO Oliver Blume said the plan sends a clear signal for the group's future and will make its brands more attractive and competitive. > "This is a strong signal for the future of Volkswagen Group," Blume said in a statement.
The restructuring will also streamline leadership structures and shorten decision-making lines. Chief employee representative Daniela Cavallo described the plan as necessary for the company to move successfully into the next decade, noting that it should not place the burden solely on employees. > "A necessity for our company to move successfully into the next decade without the associated undertakings coming only on the side of the employees," Cavallo said.
Lower Saxony Governor Olaf Lies acknowledged the company's "enormous" challenges and called the plan a shared path toward needed transformation. > "A shared path toward the necessary transformation," Lies said.
Volkswagen, which employs about 650,000 people, reported a 30% decline in after-tax earnings for the first half of the year as sales fell in China. The company’s portfolio includes the Volkswagen, Audi, Skoda, Porsche and SEAT brands.