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Volkswagen to Shut Four German Plants, Cut 100,000 Jobs: Report
The German auto giant is considering sweeping workforce reductions and plant closures to restore profitability as slowing demand and growing competition reshape the global automotive industry.
Volkswagen may consider shutting four German factories and reducing its workforce by as much as 100,000 as it aims to bolster profitability. These measures are set to be reviewed by the supervisory board on July 9th, although not formally confirmed yet.
The group, under increasing pressure from Chinese manufacturers and rising production costs, recently sold about 9 million cars worldwide in 2024 and saw an 15% drop in its operating profit.
The proposed cuts would become one of the largest job reductions for the world's No. 2 auto maker in its history and would follow a reduction plan already negotiated in 2024 covering 35,000 workers by employee representatives.
Cost Review Extends Across Core German Operations
VW's report will scrutinise sites in Hanover, Emden, Zwickau and an Audi factory in Neckarsulm, all together 45,000+ jobs. Europe and the USA continue to be significant markets but with declining demand, while even strong sales for EVs in Europe still see market share put under strain by the chinese electric vehicle market.
"Cost Review is Not Just a Core German Operation", it states. Labour representatives and the German state of Lower Saxony with a stake in Volkswagen will be closely watching for developments.
Volkswagen subsidiary Audi is reportedly also evaluating changes at its plant in Neckarsulm, Germany. Collectively, the four locations represent one of Germany's largest manufacturing operations and employ more than 45,000 workers combined.
Volkswagen, which has not confirmed the number of job cuts or which factories would be affected, stated that it's examining measures to increase efficiency and secure the company’s competitiveness in the future.
This comes at a time when automakers face falling demand in multiple regions, increased manufacturing expenses, and mounting competition from Chinese companies, especially in the electric vehicle (BEV) market.
Automakers are also grappling with higher tariffs on vehicle imports into the United States.
Profitability Under Pressure
Volkswagen's finances were squeezed last year. Revenues rose slightly to 324.7 billion in 2024, but operating profit slid by 15% to 19.1 billion due to a combination of increased restructuring expenses and reduced revenues in some areas.
The automaker sold around 9 million vehicles globally. Even with more powerful chinese ev rivals, Europe remained vw's largest region in terms of car sales, while china was its biggest single-country market. The U.S. Remains significant for vw and audi, with North america considered an important growth region.
Sales of battery-electric vehicles (BEVs) within the European Union increased in the early part of 2025 according to figures from the European Automobile Manufacturers' Association (ACEA), but European manufacturers are struggling to hold onto their share of some market segments as chinese brands compete effectively, further squeezing profit margins.
Labour relations are heating up even as job cuts loom. If such cuts and facility closings are proposed, they are sure to meet resistance from labor unions and the German state of Lower Saxony, which holds a sizable ownership stake in VW and has representatives on its supervisory board.
While no official announcements have been made by management, these reports of strategic adjustments will undergo an internal review before being presented to the supervisory board next month.
Source: CNBC
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