Volkswagen's 100K Job Shock?

German auto giant Volkswagen Group is considering one of the most extensive restructuring exercises in its history, with Chief Executive Officer Oliver Blume reportedly weighing plans that could result in up to 100,000 job cuts, the closure of multiple factories in Germany, and a significant reduction in investment spending.

According to a report by Manager Magazin, the proposed overhaul is awaiting approval from the company's board and would involve a 15 per cent reduction in Volkswagen's planned investments over the next five years. The move would lower the group's capital expenditure to slightly above €130 billion.

As part of the restructuring effort, Volkswagen is also exploring the possibility of separating its core Volkswagen passenger car brand and its parts business into independent entities. The proposed changes are aimed at simplifying operations and improving efficiency as the automaker grapples with growing challenges in the global automotive market.

The company has been facing increasing pressure from multiple fronts, including US tariffs, intensifying competition from Chinese electric vehicle manufacturers, and rising costs associated with its transition to electric mobility.

CEO Oliver Blume has repeatedly emphasised the need for Volkswagen to sharpen its focus on its core automotive operations and enhance profitability. Reports suggest that production could eventually end at Volkswagen's Hanover, Zwickau and Emden plants, along with Audi's Neckarsulm facility, once existing vehicle programmes are completed.

The latest proposals would go beyond Volkswagen's previously announced plan to cut around 50,000 jobs and could affect nearly 15 per cent of the group's global workforce, making it one of the largest restructuring efforts in the company's history.

Volkswagen declined to comment directly on the reported internal plans but acknowledged that the entire group must undergo "far-reaching change" to remain competitive, the report said.

Meanwhile, the company's works council and Germany's powerful IG Metall union have vowed to strongly oppose any attempts to shut factories or implement deeper workforce reductions, setting the stage for potential labour disputes if the proposals move forward.