Volkswagen is weighing a drastic restructuring that could see up to 100,000 jobs cut globally and four German manufacturing plants shuttered. This potential move, reported by Manager Magazin, would double a previously announced target of 50,000 reductions.
The plants under consideration for closure are reportedly in Hanover, Zwickau, Emden, and Neckarsulm, employing over 45,000 workers combined. VW shares fell 3-4% on the news.
CEO Oliver Blume is driving the effort to boost competitiveness. The automaker faces declining electric vehicle demand, intense pressure from lower-cost Chinese rivals like BYD, and the impact of U.S. tariffs. First-quarter 2026 results showed a 28% drop in net profit.
A major complication is existing job-security agreements with powerful German unions, which run through 2030 for the core brand and 2033 for Audi. These binding commitments make compulsory layoffs legally difficult, potentially leading to costly scenarios where workers are paid not to work.
The potential closure of the Zwickau plant, a flagship EV facility, underscores the severity of VW's strategic challenges.