Volkswagen is reportedly lining up the most brutal restructuring in its 89-year history, and the numbers are staggering. According to two people familiar with the matter who spoke to Reuters, the automaker is weighing the closure of four German factories and the elimination of as many as 100,000 jobs. If it actually happens, it would be the largest overhaul the company has ever attempted and one of the biggest shakeups the auto industry has ever seen. This is not a tweak to the budget. This is Volkswagen considering taking a chainsaw to its own backbone.
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What’s Actually On The Table
The proposed plan has already been put in front of members of Volkswagen’s supervisory board, and the sources say it is set to be discussed at a meeting on July 9. The factories reportedly in the crosshairs are in Hanover, Zwickau, and Emden, along with Audi’s Neckarsulm site. Shutting those four alone would put more than 45,000 jobs at risk. Stack that on top of roughly 50,000 layoffs the company had already planned, and the total damage could climb toward 100,000 workers.
That kind of cut does not have many parallels in the car business. It would rival what General Motors went through during and before its 2009 bankruptcy. It would also echo GM’s downsizing in the early 1990s, when the American giant wiped out as many as 74,000 jobs over four years and closed or idled 21 plants. Volkswagen is now staring at something on that same historic scale.
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Why Volkswagen Is Backed Into A Corner
The pressure is coming from every direction at once. Chinese manufacturers are eating into Volkswagen’s territory with aggressive products and pricing. U.S. tariffs on imported vehicles are squeezing the margins on cars built for export. On top of that, demand across Europe has gone soft, leaving the company with more capacity than it can fill. Volkswagen has already admitted that this combination is making its current business model harder and harder to keep alive.
CEO Oliver Blume reportedly walked the proposal in front of senior executives earlier this week. The goal was to build internal support before the inevitable wall of opposition shows up. Blume knows exactly who is waiting for him on the other side, because he has run into them before.
The Bigger Plan Behind The Cuts
Manager Magazin, which first reported the restructuring, says the plan goes well beyond shutting plants. Volkswagen reportedly intends to slash planned investment by around 15 percent, bringing it down to just over $148 billion over the next five years. That is a serious pullback for a company that has spent heavily trying to keep up. Blume and Chief Financial Officer Arno Antlitz are said to be chasing a sweeping reorganization of the entire group.
Part of that reorganization could involve splitting the core Volkswagen brand and its parts operations off into separate businesses. A company spokesperson declined to discuss what Volkswagen called confidential documents, but did say the whole group, including its brands and subsidiaries, has to go through far-reaching change. That is corporate language for bracing everyone involved for pain.
Labor Is Ready For War
The unions are not waiting around to react. Volkswagen’s works council and Germany’s powerful IG Metall union came out swinging in a joint statement on Friday, vowing to do everything within their power to stop the plans if they move forward. The premier of Lower Saxony, which happens to be Volkswagen’s second-largest shareholder, also flatly rejected the proposal and said the state would not back it. Porsche SE, the investment company controlled by the Porsche and Piech families and the company’s largest shareholder, declined to comment.
This is where Volkswagen’s unusual structure becomes a real problem for management. The company’s governance model hands significant influence to both labor representatives and the Lower Saxony government. That setup is now headed for fresh scrutiny, because it gives the people most opposed to these cuts a powerful seat at the table.
We’ve Seen This Fight Before
Blume already tried to close German factories back in 2024, and it did not end well for management. Strong resistance from the unions forced the company to walk away from those plans entirely. At the time, leadership had floated closing or selling several facilities to trim excess production capacity and deal with slowing electric vehicle demand. That effort triggered strikes and a long standoff with IG Metall and the works council, both of which carry serious weight inside the company.
Volkswagen employed 667,164 people worldwide during its 2025 financial year, and nearly 43 percent of that workforce sits in Germany. That is the human cost hanging over every line of this proposal. The real question now is whether Blume can push through a plan this severe without sparking the same revolt that buried his last attempt, or whether Volkswagen’s own structure makes that fight impossible to win.
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