Volkswagen to cut 100,000 jobs in biggest restructuring ever in the auto industry
Volkswagen is set to lay off 1 in 7 of its workers. The German car giant announced that company executives and unions had agreed to cut 50,000 jobs by the end of the decade, in addition to the 50,000 already planned, bringing the total number of layoffs to 100,000. “It is essential that the workforce level is systematically aligned with economic reality,” said the group representing 10 brands.
Hit by US tariffs, weak demand for electric cars and, above all, fierce competition from China, Europe's largest carmaker is in deep trouble. The 100,000 job cuts would be the biggest restructuring ever carried out in the global auto industry, amounting to about 15% of its workforce worldwide. The previous record was held by General Motors, which cut 74,000 jobs and closed 21 plants in 1991 as it lost ground to Japanese rivals, and cut another 47,000 jobs globally in 2009 as it restructured in the wake of the financial crisis.
Volkswagen executives and unions agreed that the future of four German plants, in Hannover, Emden, Zwickau and Neckarsulm, may not be certain until the 2030s. If this scenario materializes, it would mark the first time Volkswagen has closed factories on a large scale in its home country.
The approval of the plans by Volkswagen's supervisory board, which consists of union representatives and shareholders, marks progress in delicate negotiations between the parties. "The supervisory board has unanimously approved the future plan presented by the executive board," said the company's chief executive, Oliver Blume. "This is a strong signal for the future of the Volkswagen Group," he added.
In addition to the eponymous brand, Volkswagen's product line also includes Škoda, SEAT and Cupra in the mass market, Audi, Bentley, Lamborghini and Ducati in the premium and luxury segment, and Porsche as a sports brand.
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