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Volkswagen is facing one of the most consequential moments in its nearly 90-year history. Reports suggest the German automaker is weighing sweeping changes that could reshape its factories, workforce, and future as it struggles with mounting pressure from a rapidly changing global car market. If the plans move forward, the impact would extend far beyond Germany, affecting employees, suppliers, investors, and one of the world’s best-known automotive brands.
The Plan Under Discussion
According to Reuters, Volkswagen’s supervisory board is expected to discuss a sweeping restructuring proposal at a July 9 meeting. People familiar with the matter say the plan could eliminate up to 100,000 jobs and close four factories in Germany, adding to roughly 50,000 workforce reductions already planned. If approved, it would become the largest restructuring in Volkswagen’s history and one of the biggest workforce overhauls the global auto industry has ever seen.
Four Factories Could Be On The Chopping Block
Sources say the proposal targets Volkswagen’s plants in Hanover, Zwickau, and Emden, along with Audi’s factory in Neckarsulm. Together, those facilities employ more than 45,000 workers. Reuters reports the factories would not necessarily close immediately, with some expected to continue operating until current vehicle production ends before being phased out.
Why Europe’s Largest Carmaker Is Taking Such A Big Step
Volkswagen has faced mounting pressure on several fronts. The company is grappling with slowing vehicle demand in Europe, fierce competition from rapidly expanding Chinese automakers, softer-than-expected electric vehicle sales, and tariffs affecting vehicles exported to the United States. Company representatives have acknowledged that the entire group must undergo “far-reaching change,” although they have not commented directly on the reported restructuring plans.
China Has Become One Of Volkswagen’s Biggest Challenges
For decades, Volkswagen dominated the Chinese auto market, but that position has changed dramatically. Reuters reports the automaker was overtaken by BYD in 2024 and slipped to third place in China during 2025 behind both BYD and Geely. Industry data cited by Reuters also shows non-Chinese automakers’ combined market share in China fell from 57% in 2020 to 32% in 2025 as domestic electric vehicle manufacturers rapidly expanded.
The Company Is Looking Beyond Job Cuts
The reported overhaul extends beyond workforce reductions. Reuters says CEO Oliver Blume and Chief Financial Officer Arno Antlitz are exploring cutting planned investment by roughly 15%, reducing manufacturing capacity, lowering overhead costs, and potentially separating the core Volkswagen brand and parts operations into distinct business entities. The broader goal is to reduce costs while making the company more competitive in a rapidly changing automotive market.
Resistance Is Already Building
Any restructuring of this scale faces significant political and labor obstacles. Volkswagen’s powerful works council and Germany’s IG Metall union have pledged to oppose any factory closures or additional layoffs. Lower Saxony, the German state that owns a significant stake in Volkswagen, has also indicated it would resist the proposal. Employment guarantees covering many workers reportedly remain in effect through 2030, making negotiations especially complex.
Investors Say Cost Cuts Alone Won’t Solve Everything
While some investors support aggressive restructuring, others argue Volkswagen’s challenges run deeper than operating costs. Reuters quoted Deka investment manager Ingo Speich, who said the company’s biggest problem is weak sales rather than simply high expenses. Analysts say Volkswagen ultimately needs vehicles that generate stronger consumer demand, particularly in the increasingly competitive electric vehicle market.
A Restructuring That Could Rewrite Industry History
If Volkswagen ultimately proceeds with 100,000 job cuts, Reuters says the overhaul would surpass previous workforce reductions by the company and rank among the largest in automotive history. For comparison, General Motors announced plans to eliminate 74,000 jobs in 1991 and later cut more than 60,000 factory positions during its financial crisis before the 2009 bankruptcy. Volkswagen itself previously announced about 30,000 job cuts in 1993.
What Happens Next Could Shape More Than Volkswagen
The restructuring remains under discussion, and significant negotiations are expected before any final decisions are made. Even if the supervisory board supports the proposal, unions, employee representatives, and government stakeholders could still reshape or delay its implementation. The outcome will help determine not only Volkswagen’s future but also how Europe’s legacy automakers respond to intensifying competition, shifting consumer demand, and the costly transition toward electric vehicles.