Volkswagen Layoff: Auto giant may cut 100,000 jobs despite CEO’s ‘smarter solutions’ promise
Volkswagen is considering cutting another 50,000 jobs, according to an internal memo seen by AFP, as Europe’s biggest carmaker looks for ways to cope with growing challenges.
This comes on top of the 50,000 layoffs Volkswagen has already made in Germany; this includes 35,000 at the main Volkswagen brand under a 2024 deal with unions. If total layoffs reach 100,000, it will mark the largest restructuring in the history of the global automotive industry; That would surpass the 50,000 jobs General Motors shed when it declared bankruptcy in 2009.
The move comes just days after CEO Oliver Blume ruled out factory closures, telling Germany’s Bild am Sonntag that “there are smarter solutions” than shutting down plants.
The German auto giant has been under intense pressure from US tariffs, lower profit margins on electric cars and, above all, fierce competition from China, where automakers are now increasingly exporting to Europe.
‘Group must act now’ on Blume dismissal, internal memo shows
In a statement outlining cost-saving plans, Blume told workers the group needed to “take immediate action” to secure its future.
“We need to become more efficient, more robust and simpler. We need to reduce our costs,” he said, adding that VW’s costs are around 20% higher than its competitors and so overhead costs need to be reduced to a “competitive level”.
“As half of our overhead comes from personnel costs, a theoretical calculation (assuming no change in labor costs) would result in the loss of approximately 50,000 jobs,” he said.
VW is also the parent company of car brands ranging from SEAT to Audi and Porsche, and Blume also confirmed that the future of four German factories is uncertain.
“The fact is that under today’s conditions we cannot confirm that the Emden, Hannover, Zwickau and Neckarsulm plants will be able to operate competitively in the 2030s,” he said.
Disturbing…: Blume on media leaks about layoffs
Meanwhile, unions strongly criticized VW and Blume for inconveniencing employees by allowing media reports of mass layoffs to spread without comment and demanded that the CEO take a public stand.
In the memo, Blume insisted the leaks to the media were unplanned and said news of the impending cuts made him “angry.”
“Disclosing such confidential, sensitive information not only unsettles our workforce but also harms our business,” he said.
Some industry analysts have suggested that Volkswagen deliberately publicized the 100,000 figure as a negotiation tactic, and that the final cut figure will likely be lower.
Volkswagen isn’t the only German automaker to see its business suffer lately. BMW and Mercedes-Benz have also seen profits fall due to increased competition from local rivals, particularly in China, the world’s largest auto market.
