Volkswagen May Cut Up to 100,000 Jobs, Shut Four German Plants in Biggest Overhaul Yet

Volkswagen is reportedly considering one of the biggest restructurings in its nearly 90-year history, with plans to shut four factories in Germany and increase job cuts to as many as 100,000 employees worldwide.

The proposed overhaul, which is expected to be discussed by Volkswagen's supervisory board on July 9, comes as the German automaker struggles with slowing electric vehicle demand, US tariffs, and intensifying competition from Chinese rivals such as BYD, Chery, and SAIC.

Four German Factories Could Shut

According to Reuters, citing people privy to the matter, Volkswagen is evaluating the closure of its plants in Hanover, Zwickau, Emden, and Audi's Neckarsulm facility. The closures would put more than 45,000 jobs at risk. If approved, they would come on top of the 50,000 job reductions the company had already agreed with unions in late 2024, taking the total planned workforce reduction to as many as 100,000 employees.

CEO Wants to Fundamentally Restructure Volkswagen

The reported proposal is part of CEO Oliver Blume's broader plan to reshape Europe's largest carmaker. Besides cutting jobs, Volkswagen is said to be considering reducing planned investments by around 15%, lowering its five-year capital expenditure to just over €130 billion. The report also suggests management is exploring spinning off the core Volkswagen passenger car brand and its parts business into separate entities as part of a wider restructuring.

Volkswagen has not confirmed the reports but acknowledged that the entire group must undergo "far-reaching change" as the automotive industry transforms.

Chinese Carmakers Are Putting Volkswagen Under Pressure

The biggest challenge facing Volkswagen is no longer Tesla. Instead, it is Chinese manufacturers.

For years, Volkswagen dominated the Chinese car market. However, it was overtaken by BYD in 2024 and slipped to third place in 2025 as local automakers rapidly gained market share with competitively priced electric vehicles. According to consultancy AlixPartners, the combined market share of foreign automakers in China fell from 57% in 2020 to just 32% in 2025.

The pressure is no longer limited to China. Chinese brands are expanding aggressively across Europe, with manufacturers including BYD, Chery, SAIC, and Leapmotor steadily increasing their presence in Volkswagen's home market.

Unions Promise to Fight Back

The proposals are expected to face fierce resistance. Volkswagen's powerful works council and Germany's IG Metall union have already vowed to oppose any factory closures or additional layoffs, saying they would do "everything in our power" to prevent them. The state of Lower Saxony, Volkswagen's second-largest shareholder, could also oppose the restructuring.

A Defining Moment for Europe's Largest Carmaker

Volkswagen employed 667,164 people globally in 2025, with nearly 43% of its workforce based in Germany. A reduction of up to 100,000 jobs would represent roughly 15% of its global workforce, making it one of the largest restructurings in the company's history.

The announcement also reflects a broader shift taking place across the global automotive industry. Traditional manufacturers are being squeezed by the expensive transition to electric vehicles, slowing demand in key markets, and the rapid rise of Chinese competitors that are proving difficult to match on both price and technology.