Volkswagen, the world’s largest automobile manufacturer, is planning to cut approximately 1,00,000 jobs over the coming years, amounting to nearly 15 percent of its global workforce. The company is also considering closing four factories in Germany and reducing investments by 15 percent over the next five years.
In addition, Volkswagen is weighing a significant structural restructuring — separating its passenger car division and auto components business into independent entities. The company currently employs 6,60,000 people worldwide and already has an existing plan to reduce 50,000 jobs in Germany alone by 2030. Luxury brands such as Audi and Porsche also fall under the Volkswagen group.
Like other European automakers, Volkswagen is grappling with intense competition and mounting losses. New tariffs on cars exported to the United States and the rapid rise of Chinese electric vehicle makers such as BYD are cited as key reasons. The company acknowledges that its traditional model of manufacturing in Europe and exporting globally is no longer viable for all its brands, making cost and investment cuts unavoidable.
German trade unions have strongly opposed the job cuts. The IG Metall union and the Works Council have warned they will use every means at their disposal to resist the plan. Volkswagen’s shares fell 1.5 percent by midday on the news, and the company’s stock has already lost more than a quarter of its value so far this year.