After a months-long deadlock, Volkswagen’s supervisory board has reached a unanimous agreement on a restructuring plan for the group. On top of the previously announced 50.000 job cuts, the plan phases out an additional 50.000 jobs, and 4 German plants are set to close.
With the agreement on VW CEO Oliver Blume’s ‘Future Plan 2030 ’, the group’s supervisory board prepares the most aggressive restructuring in its 89-year history. The additional 50.000 job cuts will bring the total to 100.000, accounting for about 15% of VW Group’s total workforce. When and how these layoffs will be carried out remain points of discussion.
The agreement avoids an open clash between the company and the workforce. Or at least for the time being. Labor unions want the group to consider all options and gather perspectives from all plants to save as many jobs as possible.
‘Alternative uses’ for four German plants
The group’s situation is dire, with falling profits linked to overcapacity, fierce competition from Chinese brands in Europe and the US, and US tariffs, among other factors. Oliver Blume earlier summarized the situation as “a business model which no longer works today”. The result is an excess capacity of 500.000 in VW’s European plants.
The supervisory board has not announced a closure as such, but says it cannot guarantee future production in Emden, Zwickau, Hannover, and Neckarsulm (Audi) from 2031 onward. It has now agreed on look into alternative uses for the plants.
Focus on profitability
To cut costs, the board also aims to decimate the model range of the different brands in the group. About 50% of the range of brands will disappear by 2035, with a greater focus on profitable, high-volume models. This also means production complexity will be reduced by 75%.
Organizational changes are also in the works, with leaner management to enable greater agility and faster decision-making. And the group also plans investments to strengthen its brands and boost competitiveness through improved technology. To do so, 135 billion euros will be allocated to research and development between 2027 and 2031.
The goal is to sell 9 million vehicles a year at an operating margin of 9% by 2030. In the first half of 2026, the group’s operating margin fell to 3.8%.
Political context
The agreement avoids an extraordinary shareholder meeting, which could have created an explosive situation. The blessing of the German region of Lower Saxony can be seen as a means of avoiding this. The region holds 20% of VW Group’s shares and has a veto right. The announcement was made just a few days before regional elections in Sachsen-Anhalt, where the extreme-right party AFD could gain many votes.
