Volkswagen Group is reportedly planning to cut up to 100,000 jobs and reduce or stop production at some plants, according to German media reports. The move would double previously announced staff reductions as the carmaker faces mounting pressure from Chinese competitors and the transition to electric vehicles.
Job cuts and plant closures
The proposed cuts, which could be watered down, currently involve the closure of four German factories in the medium term, including an Audi site in Neckarsulm and VW plants in Hanover, Zwickau and Emden. The company employs more than 650,000 people across all its brands, which include Audi, Bentley, Skoda, Seat and Cupra.
A Volkswagen spokesperson declined to comment on the reports, saying the company would not pre-empt the process, which involves staff and unions. However, they pointed to the widely reported challenges legacy brands face from nimble Chinese rivals that have made huge inroads into Europe with electric and plug-in hybrid cars.
Challenges and competition
“It is correct that the entire automotive industry and the Volkswagen Group are undergoing a profound transformation. The executive board has repeatedly stated that our current business model no longer works across all brands: developing cars in Germany, producing them in Europe and exporting them to the world. The world has fundamentally changed in recent years,” the spokesperson said.
According to Germany’s Manager Magazin, VW chief executive Oliver Blume’s deepening overhaul will be discussed at a supervisory board meeting next month. He has already announced a strategy aimed at cutting €11bn (£9.49bn) from costs.
Market pressures and tariffs
On Friday, the spokesperson cited tariffs, competition and “stagnating, sometimes declining” markets that can create “burdens on the company reaching tens of billions of euros per year.” To survive, the company has to adapt, requiring a sharper focus on costs and investment.
“The entire group, including brands and subsidiaries, have to transform profoundly,” they added.
Despite the challenges, VW has made some headway in China. In March, it reclaimed car sales dominance in China, the world’s largest auto market, in the first two months of 2026, when Toyota also regained ground, both overtaking local electric vehicle champion BYD amid fading subsidies for greener cars. However, earlier this month BYD’s boss said it aimed to become the world’s largest auto company within five years.
Market share data
VW’s Chinese joint ventures with FAW and SAIC held a combined 13.9% share of the country’s passenger vehicle market in sales terms, followed by Geely’s 13.8% and a combined 7.8% from Toyota’s joint venture with GAC and FAW, data from the China Passenger Car Association showed.
