Volkswagen CEO Says Further Workforce Reductions May Be Needed Amid Cost Pressures

Volkswagen is evaluating additional workforce reductions as it looks to improve its cost structure in an increasingly competitive global automotive market.

According to an internal memo seen by Reuters, CEO Oliver Blume told employees that the company may theoretically need to eliminate around 50,000 more jobs worldwide. The assessment comes after the group had already agreed to approximately 50,000 job reductions across Volkswagen, including its Porsche and Audi businesses.

Blume said the company has identified a cost disadvantage of about 20% compared with similar competitors. He added that Volkswagen is reviewing each brand, business unit and region to determine what changes are both necessary and practical.

The memo follows discussions with the company's supervisory board, where labour representatives reportedly opposed proposals that included further job cuts and the possible closure of four manufacturing plants.

Blume noted that Volkswagen has not yet identified long-term competitive plans for its facilities in Emden, Hanover, Zwickau and Neckarsulm during the 2030s. However, he reiterated that the company favours "intelligent solutions" instead of factory shutdowns, pointing to alternatives such as defence-sector production or manufacturing Chinese Volkswagen models in Europe for underutilised sites.

Following the stakeholder meetings, Volkswagen announced plans to reduce production capacity further and gradually cut its range of vehicle models. The company did not publicly confirm any additional job reductions or factory closures.

In his message to employees, Blume said discussions would continue as the company works to determine the most suitable path forward.