Volkswagen is facing one of the toughest chapters in its history, with pressure building on several fronts. Chinese rivals are stronger than ever, European demand has lost momentum, and tariffs on cars headed to the United States have added yet another strain. Against this backdrop, management appears to believe the company can no longer keep operating under the same old playbook.
That is why Volkswagen is weighing a sweeping restructuring plan that could see four factories in Germany shut down and as many as 100,000 jobs cut. If approved, it would rank among the biggest shake-ups the auto industry has ever seen.
According to people familiar with the matter, members of the company’s Supervisory Board have already been briefed on the plan, which is expected to be discussed at a meeting on July 9.
The plants at risk are Hanover, Zwickau, Emden, and Audi’s factory in Neckarsulm. Closing these sites alone could put more than 45,000 jobs on the line, on top of around 50,000 positions that had already been marked for cuts.
CEO Oliver Blume presented the plan to senior executives this week, hoping to secure their backing before a likely showdown with labor unions and the state of Lower Saxony, Volkswagen’s second-largest shareholder.
The proposal is not limited to factories and jobs. Reports suggest Volkswagen may also cut investment by around 15% over the next five years, bringing total spending to just over €130 billion. The company is also considering a broader reshuffle that could separate the core Volkswagen brand and its components business into standalone entities.
Volkswagen declined to comment on the details, but said the wider group, including its brands and subsidiaries, needs fundamental change to face what comes next.
Resistance is already taking shape. Volkswagen’s Works Council and the IG Metall union have said they will fight any measures of this kind, while Lower Saxony has made it clear it will not support the plan.
The timing could hardly be more challenging. Volkswagen is steadily losing ground in China, after giving up the market lead to BYD in 2024 and slipping to third place behind Geely in 2025. In Europe, Chinese carmakers such as BYD, Chery, SAIC, and Leapmotor are rapidly gaining traction, putting Volkswagen under direct pressure in its own backyard.
For Oliver Blume, this is no longer just about trimming costs or cutting jobs. Volkswagen now needs to make its cars desirable again and win back buyers in a market being rewritten by the rise of electric vehicles.
