Volkswagen is Fighting Rising Costs and Global Competition. Its CEO Says 100,000 People Could Be Laid Off To Reorganize

Volkswagen CEO Oliver Blume has warned employees that the German automotive giant may need to eliminate roughly 50,000 additional jobs on top of previously announced workforce reductions, underscoring the scale of the company’s effort to restore profitability as it grapples with mounting costs, global competition and trade pressures.

According to an internal memo seen by Reuters, Blume told staff that Volkswagen has identified a cost disadvantage of about 20% compared with rival automakers. To close that gap, management has calculated what it described as a “theoretical deduction” of another 50,000 jobs worldwide, effectively confirming for the first time that the company is evaluating reductions totaling up to 100,000 positions across the group.

Europe’s largest automaker faces one of the most challenging periods in its recent history. “We are currently assessing across all brands, companies and regions how many adjustments are actually necessary and feasible,” Blume wrote in the memo, signaling that no final decisions have yet been made regarding the additional reductions.

The automaker has been under increasing financial pressure from several directions. Billions of euros in tariff-related costs have weighed on earnings, while fierce competition in China, the world’s largest automotive market, has eroded Volkswagen’s market position. At the same time, the company is trying to modernize its German manufacturing operations as demand shifts toward electric vehicles and lower-cost competitors gain ground.

There is growing frustration among employee representatives, who have demanded greater transparency about the company’s long-term restructuring strategy after Blume presented his plans to Volkswagen’s supervisory board.

According to sources familiar with the discussions cited by Reuters, labor representatives on the board pushed back against management’s proposals.

The plants that could be affected include facilities in Emden, Hanover, Zwickau and Neckarsulm, all of which play significant roles in Volkswagen’s German production network. “As of today, we still cannot confirm competitive use cases for the plants of Emden, Hanover, Zwickau and Neckarsulm in the 2030s,” Blume wrote in the memo, raising fresh concerns about the future of several major production sites.

While the document acknowledges that plant closures remain under consideration, Blume emphasized that management would prefer alternatives. The CEO said Volkswagen favors finding “intelligent solutions” instead of shutting factories outright, suggesting the company hopes to identify ways to repurpose facilities or improve efficiency rather than permanently closing production sites. However, he also made clear that every brand, region and business unit will be reviewed as executives determine the scale of restructuring required.

Volkswagen had previously declined to comment on reports that it was considering workforce reductions of up to 100,000 employees. The internal communication marks the clearest indication that management views further job cuts as a realistic possibility if the company is to remain competitive.