Volkswagen Prepares Cuts of Up to 140,000 Jobs in Germany

Volkswagen is seeking to cut at least 10 billion euros in overhead costs, a target now at the center of a series of meetings that the company’s management began with employees in Wolfsburg on August 25. Group CEO Oliver Blume and Volkswagen brand chief Thomas Schafer are presenting the restructuring plan at the flagship plant, the first time they have faced workers in person since details of the scale of the cuts leaked.

The meetings continue on August 26 in Emden and Zwickau. CFO Arno Antlitz speaks on August 31 in Hanover, while Thomas Schmall, the board member responsible for components, is handling communication at the remaining German plants. In total, nine meetings with employees are planned over seven days, a format management is using to respond directly after the works council’s ultimatum went nowhere before the summer break.

How many jobs are at risk

The official plan calls for cutting up to 100,000 jobs. Employee representatives, however, warn that the final number could reach 140,000, once positions at suppliers and related businesses are counted. Volkswagen employs roughly 657,000 people worldwide, and the plants seen as most exposed are Emden, Hanover and Zwickau, along with Audi’s plant in Neckarsulm.

Management argues that costs at the German plants run about 30% higher than at some competitors. The plan therefore also calls for cutting European production capacity by more than 500,000 vehicles a year, narrowing the model lineup by up to 50% by 2035, and reducing the number of equipment options by up to 75%. According to management’s earlier statements, the group’s results are further weighed down by falling sales in China and underused capacity at the German plants.

This is not the first round of cuts employees have gone through. Workers had already agreed to eliminate tens of thousands of jobs, only to later be told that further cuts were needed, which has deepened distrust among staff toward the announcements coming out of Wolfsburg.

One point that has been misreported in recent days needs correcting here. The German plants already achieved an average cost saving of 20% per site last year, meaning this is a result already delivered, not a future goal. Blume has told employees that even this is not enough, since the group, in his words, is too large and too complicated to reach the necessary savings at that pace.

Sources differ on the final profitability target. Bloomberg reports that Blume is aiming for a profit margin of 9%, while German media write of a range of 8% to 10% of revenue by 2030. Volkswagen’s current margin stands at 3.8%.

What the union says

IG Metall chief Christiane Benner has publicly rejected that target, calling it a castle in the air and demanding concrete measures from management instead of new announcements. The local union representative at the plant has said the union is ready to consider a strike if Blume does not abandon the plan.

The scale of the resistance is also captured in an assessment from Wolfgang Schroeder, a political science professor at the University of Kassel who follows relations between German employers and workers:

There are many opponents, many who can exercise a veto, and very little support.

The state of Lower Saxony, which holds veto power over strategic decisions on Volkswagen’s supervisory board, further narrows Blume’s room to maneuver. Management has two weeks to convince that board of its targets for 2030, and it already ran into resistance on the same body in July, chiefly from employee representatives and the state government.

Blume is also under pressure from the Porsche and Piech family holding company, the owner of Volkswagen’s controlling stake, which has called on management to speed up the transformation and described this phase of the company as a historic turning point. The family has its own reason to push for speed: falling profit at Volkswagen and Porsche is directly cutting into the dividends it has long relied on.