Volkswagen is preparing to eliminate as many as 100,000 jobs and stop production at four factories in Germany, a restructuring the company’s leaders describe as the most radical in its 89-year history. The plan was reported Friday, June 26, by the German business magazine Manager Magazin and was presented to Volkswagen’s management board earlier in the week by Chief Executive Oliver Blume, according to that report. A company spokesperson, declining to discuss what it called internal and confidential documents, said the automaker now needs sharper discipline over costs and investment, and acknowledged that its long-standing model of building cars in Europe and shipping them around the world no longer works for all of its brands.

The reductions would fall on roughly one in six workers. Volkswagen employed about 657,400 people worldwide at the end of the first quarter of 2026, so a cut of 100,000 positions amounts to close to 15% of the entire payroll. The four plants marked for shutdown are in Hanover, Zwickau and Emden, along with a site in Neckarsulm operated by the company’s Audi division. Those four locations together employ more than 45,000 people, and the remaining cuts would be spread across Volkswagen’s global operations over the coming years.

The plan lands hardest because of a promise it breaks. In late 2024, Volkswagen reached an agreement with its unions that ruled out German factory closures and held off forced job cuts until the end of 2030. The company had already lined up a program to shed about 50,000 German jobs by that date, and at its annual meeting this month it said departure agreements covering more than 28,000 workers across Volkswagen, Audi, Porsche and its software unit CARIAD had already been signed. The new figures would roughly double the earlier target and tear up the no-closures deal years ahead of schedule.

Labor leaders reacted within hours. IG Metall, Germany’s powerful industrial union, and Volkswagen’s General Works Council said in a joint statement that they would fight the plan with all their might if it moved forward. In Germany, that threat carries unusual weight: union representatives hold seats on the company’s supervisory board, contracts run for years, and many towns are built around a single factory gate. A formal board discussion of the proposal is scheduled for July 9.

The pressure behind the move comes from two directions at once. Chinese automakers, led by BYD, have flooded the market with cheaper and increasingly capable electric vehicles, eating into Volkswagen’s market share at home and abroad. At the same time, European demand for electric vehicles has softened, leaving the company building fewer cars while still carrying the costs of a manufacturer built for a much larger era. Volkswagen’s single largest market, China, saw first-quarter sales fall 20%. Finance Chief Arno Antlitz has put the annual cost of U.S. tariffs at roughly €4 billion.

The strain is already visible in the company’s financial results. First-quarter net profit fell 28% from a year earlier to €1.56 billion, while revenue slipped 2% to €75.7 billion. The proposed overhaul would also reduce Volkswagen’s planned five-year investment by about 15%, to just above €130 billion. Volkswagen shares are down more than 25% so far this year and have lost nearly 60% of their value over roughly the three years since Blume became chief executive.

Beyond the headcount figures, Manager Magazin reported that Volkswagen is weighing a deeper structural change: separating its core passenger-car brand and its auto-parts business into standalone entities. Such a move would go well beyond ordinary cost-cutting and amount to a major reshaping of one of the world’s largest automakers, whose portfolio includes Volkswagen, Audi, Porsche, Skoda, SEAT, Bentley, Lamborghini and other brands.

For American workers and car buyers, the immediate effect is limited. Volkswagen’s lone U.S. assembly plant in Chattanooga, Tennessee, employs more than 4,000 people and is not among the facilities identified for closure. However, the company’s restructuring could ripple through its global supplier network. Parts manufacturers, logistics companies and dealerships connected to the German operations may also face pressure as production is scaled back. With the supervisory board scheduled to consider the proposal in July, the battle between Blume’s management team and Germany’s powerful labor unions is only beginning.

JBizNews Desk | New York
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