Volkswagen announced on Thursday that it plans to cut 100,000 jobs by the end of the decade, marking the largest job reduction in the automotive industry. The decision follows approval from management and trade unions for a plan that includes an additional 50,000 job cuts on top of 50,000 redundancies already agreed upon. This total represents approximately 15% of Volkswagen's global workforce. The cuts surpass the 50,000 job reductions made by General Motors after its bankruptcy in 2009.
Volkswagen's statement emphasized the need to align workforce levels with economic realities. The company also indicated uncertainty regarding the future of four major German plants located in Hannover, Emden, Zwickau, and Neckarsulm, which could potentially close, marking the first complete shutdown of Volkswagen factories in Germany.
An employee from the Zwickau plant expressed concern over the impact of a potential closure on the region's economy, stating that the plant and its suppliers are vital to the local community.
Volkswagen faces challenges from U.S. tariffs, competition from China, and slow demand growth for electric vehicles. Despite these challenges, CEO Oliver Blume described the job cuts as a strong signal for the future of the Volkswagen Group.
While specific details on the timing and distribution of the job cuts were not provided, Volkswagen indicated a shift in focus towards North America and plans to increase exports to developing markets. The restructuring plan includes a significant investment aimed at enhancing technological capabilities through research and development, as well as streamlining operations by reducing the number of businesses and holdings by about one-third.