WOLFSBURG – Volkswagen Chief Executive Oliver Blume told the carmaker’s global workforce on Monday that Europe’s largest automaker may need to eliminate 50,000 more jobs on top of the 50,000 positions already agreed under the 2024 restructuring deal, effectively confirming for the first time that VW is targeting a total reduction approaching 100,000 roles, or roughly one in six of its 630,000 employees worldwide.
The disclosure came in an internal memo Blume sent to staff at Volkswagen AG, seen by Reuters. It followed demonstrations at multiple German plants last week, where employees demanded that management explain restructuring plans the supervisory board rejected at a Thursday meeting after labor representatives voted against them.
Blume framed the additional cuts as a “theoretical deduction” required to close what the company calculates as a 20 percent cost disadvantage against comparable carmakers. “We are currently assessing across all brands, companies and regions how many adjustments are actually necessary and feasible,” he wrote. The memo encompassed the entire Volkswagen Group, which spans Porsche, Audi, SEAT, Skoda, Lamborghini, and Bentley alongside the core brand.
Four German factories were named directly: Emden, Hanover, Zwickau, and Audi’s plant in Neckarsulm. “As of today, we still cannot confirm competitive use cases for the plants in the 2030s,” Blume wrote. The language stopped short of announcing closures. The company said it prefers what Blume called “intelligent solutions” and raised two alternatives: repurposing idle capacity for European defense contractors expanding under the continent’s rearmament drive, or shifting VW models originally designed for the Chinese market to underused German assembly lines.
The memo arrived days after workers staged demonstrations across German facilities, mobilized by IG Metall in what the union described as the broadest simultaneous plant-floor protest in Volkswagen’s postwar history. IG Metall chief Christiane Benner issued a direct warning: “If these plans came to fruition, we would stop them with all our might.” The 2024 agreement that yielded the initial 50,000 cuts also carried commitments to preserve German plants through 2030. Blume’s memo does not formally repudiate those commitments, but its logic is difficult to reconcile with them.
Volkswagen’s crisis converges three structural pressures. US tariffs introduced in 2025 are projected to cost the group roughly 5 billion euros annually. In China, where VW once held a dominant position built over four decades, deliveries have fallen to their lowest level since 2011 as local manufacturers led by BYD have taken market share faster than European automakers modeled. As Euronews reported, profit margins on electric vehicles remain negative across most of the group’s lineup, a structural gap that has widened rather than closed as new models reach the market.
The ownership structure creates institutional constraints that most multinational restructurings do not face. Lower Saxony holds a 20 percent stake in Volkswagen Group and a blocking share under the Volkswagen Act, a legacy arrangement dating to the company’s post-war founding that gives regional politicians effective veto power over major structural decisions. Worker representatives already hold a supervisory board majority following a recent resignation, and the board’s Thursday vote reflected a coalition of state and labor interests aligned against Blume’s proposals.
His decision to communicate the scale of the restructuring directly to employees rather than through the board may reflect a calculation that internal pressure from workers who understand the company’s cost position can shift the dynamics that blocked his proposals. A previous supervisory board vote rejected management’s restructuring plans as the confrontation between Blume and labor entered a more public phase.
Neither alternative raised in the memo carries a committed timeline. The defense-sector proposal reflects a broader European calculation that automotive factories idled by the EV transition might find new buyers among defense manufacturers rearming across the continent, but no binding contracts have been disclosed. The China-model reversal runs counter to the economic rationale that drove VW to manufacture in China in the first place, where labor costs and proximity to the market made local production the dominant model for three decades.
Germany’s other major automakers face versions of the same structural problem. BMW posted its steepest quarterly profit decline in years in May. Mercedes-Benz has twice lowered its 2026 earnings guidance. The country’s car industry, which once anchored Germany’s high-wage, export-led economy, is navigating simultaneously the slowest electric transition in the developed world and the highest tariff exposure among major automotive markets.
The CEO’s 100,000 job cut proposal, first outlined internally in June, has now been placed directly before the workforce in writing for the first time. The supervisory board is expected to reconvene for further restructuring discussions, but no date has been publicly set. Until that meeting produces an outcome, Monday’s memo is the most explicit signal Volkswagen’s leadership has placed before workers and investors about the scale of change the company believes it needs to remain competitive. Whether labor representatives will hold their coalition against it before the board reconvenes is a question neither the CEO’s memo nor the union’s warnings have answered.
