Volkswagen confirms cutting 50,000 jobs as part of its survival plan
It’s also repurposing its German factories and, reportedly, shutting down the Spanish brand Seat.
Volkswagen has approved its Executive Board's "Future Plan 2030." The company calls it the "most strategically profound transformation program" in its history, with a primary financial goal of achieving an operating margin of nine percent by — you guessed it — 2030. If you were thinking that description sounds ominous for the company's people, you would be right. Part of the plan is cutting 50,000 jobs, including management roles.
The company says it has to undergo workforce adjustment due to "intensifying global competition, shifting demand and technological change in the automotive industry." Volkswagen announced earlier this year that it was going to shed 50,000 roles, citing President Trump's tariffs and losing car sales to the booming domestic competition in China, which is the world's largest car market. By June, however, reports were going around that the automaker was looking to cut 100,000 jobs instead. Now, it looks like Volkswagen has decided on laying off 50,000 people as part of this particular restructuring effort.
In addition to cutting jobs, the company is also considering the possibility of repurposing its European factories or closing them altogether. It has admitted in its announcement that its European capacity exceeds demand by more than 500,000 units. Volkswagen is currently assessing alternative uses for its plants in Germany, specifically the ones in Emden, Zwickau, Hanover and Neckarsulm, and intends to decide on their fate by the end of June 2027.
Another step it's taking is cutting its model range by 50 percent and reducing the complexity of its offerings by 75 percent. It's killing off models that aren't selling well, and based on reports, even whole brands. According to German publication WirtschaftsWoche, the Volkswagen Group is retiring the Spanish brand Seat. The company will, however, retain Cupra, which used to be under Seat before spinning it off as its own brand. Volkswagen plans to focus on a smaller number of models, so that it can produce higher volumes or cars that sell.