Volkswagen is set to eliminate another 50,000 jobs globally as part of a broad restructuring aimed at lowering costs and improving profitability amid intensifying competition from Chinese automakers and the impact
of US tariffs.
The company’s supervisory board unanimously approved the Future Plan 2030 on Thursday. With the latest reductions added to around 50,000 jobs already covered by existing restructuring programmes, total planned job cuts across the Volkswagen Group could reach about 1,00,000.
The company has not specified where the latest positions will be eliminated or when the cuts will take place. The figure includes management roles and comes in addition to reductions already planned across Volkswagen, Audi and Porsche.
As part of the overhaul, Volkswagen also plans to cut its model range by half and reduce the number of available variants and configurations by roughly 75% by 2035. The strategy is intended to simplify production, increase volumes per model and bring down costs.
Four German manufacturing sites are facing an uncertain future under the new plan.
Volkswagen said it has so far been unable to identify competitive vehicle-production allocations for Emden, Zwickau, Hanover and Neckarsulm for the period between 2031 and 2034. Rather than announcing immediate closures, the company said it would explore other potential uses for the plants.
A fresh production strategy for Volkswagen’s European factories is expected by June 2027. The group estimates that its European manufacturing network currently has more than 500,000 vehicles of excess annual capacity compared with demand.
The restructuring also calls for changes beyond manufacturing. Volkswagen wants to simplify management, shorten decision-making processes and review its businesses and investments. The company plans to reduce its portfolio of businesses and shareholdings by around one-third, through sales or other realignments.
By 2030, Volkswagen is aiming to sell 9 million vehicles annually and achieve a 9% operating margin. That compares with an operating margin of just 3.8% in the first half of 2026. The group plans €135 billion of capital expenditure and R&D spending between 2027 and 2031.
China Competition, Tariffs Force Reset
The restructuring comes as Volkswagen faces mounting pressure in two of its most important markets.
In China, the company is dealing with weaker demand and growing competition from local electric-vehicle and traditional automakers. Volkswagen plans to adjust its operations to reflect slower growth in the country while increasing exports to emerging markets.
In North America, the group intends to focus resources on its most profitable segments.
US tariffs have added another layer of pressure. Volkswagen has estimated that tariffs could reduce its annual operating profit by around €5 billion.
The impact was already visible in the first half of 2026. Volkswagen posted an operating profit of €5.9 billion, down 11.6% from the year-earlier period. Net profit fell 31% to €3.1 billion, while the operating margin declined to 3.8% from 4.2%.
The company also booked €500 million in charges related to the end of ID.4 production in the US.
Meanwhile, Volkswagen’s vehicle deliveries in China plunged 25.9% in the first half of 2026, highlighting the scale of the challenge from local manufacturers.
Latest Cuts Build On Earlier Restructuring
Volkswagen’s latest move is the result of a restructuring effort that began nearly two years ago. The company first warned in September 2024 that German factory closures could not be ruled out as weaker sales in China and Europe coincided with high production costs.
After negotiations and warning strikes, Volkswagen and its employees reached an agreement in December 2024 to cut more than 35,000 jobs in Germany by 2030. The agreement also envisaged reducing German production capacity by 734,000 vehicles and generating more than €4 billion in annual savings.
The prospect of another 50,000 job cuts emerged in July 2026, when CEO Oliver Blume told employees that Volkswagen’s costs were around 20% higher than those of comparable companies.
The latest restructuring plan was ultimately approved after negotiations involving Volkswagen management, employee representatives and the Lower Saxony government, which owns a stake in the company.
Daniela Cavallo, chairwoman of Volkswagen’s Group and Central Works Council, called the restructuring necessary but argued that employees should not bear the entire cost.
Lower Saxony Minister-President Olaf Lies said the company would work on long-term solutions for its production sites.
Overall, the plan marks Volkswagen’s most extensive attempt yet to reshape its cost base, product portfolio and manufacturing footprint as it tries to restore margins and compete more effectively in a rapidly changing global auto market.
