Volkswagen clears 50,000 more job cuts, will halve model range; four German plants face uncertain future

As per the latest business developments, Volkswagen Group’s supervisory board has unanimously approved a restructuring plan that calls for around 50,000 additional job reductions worldwide, potentially taking total scheduled cuts across the group to around 100,000.

The Future Plan 2030 will additionally halve the group’s model portfolio and reduce the number of variants and configurations it offers by around 75 percent by 2035, Volkswagen stated on September 3, according to CNN. The firm anticipates fewer models and variants to backing elevated production volumes per vehicle and reduce costs.

Volkswagen did not disclose where the additional jobs would be eliminated or set a timetable for the reductions. The figure includes management positions and comes on top of around 50,000 job cuts already under way across the group, including programmes at its Volkswagen, Audi and Porsche businesses, according to Reuters.

Four German plants face uncertain production future

The firm stopped short of announcing the closure of four German factories identified in the plan.

Volkswagen stated it could not at present secure competitive vehicle-production allocations for its Emden, Zwickau, Hanover and Neckarsulm plants on a staggered basis between 2031 and 2034. It is examining alternative uses for the facilities.

A new production plan for Volkswagen’s European factories is scheduled to be developed by the end of June 2027. The firm estimates that its European manufacturing capacity exceeds demand by more than 500,000 vehicles a year.

The group is targeting annual sales of nine million vehicles and an operating margin of 9 percent by 2030, compared with a margin of 3.8 percent in the first half of 2026. It plans to spend 135 billion euros on capital expenditure and research and development between 2027 and 2031.

The restructuring additionally includes flatter management structures, shorter decision-making chains and a review of Volkswagen’s portfolio of businesses and shareholdings. The firm plans to reduce that portfolio by around one-third through divestments or realignments, according to the official plan.

In North America, Volkswagen stated it would concentrate on its most profitable market segments. In China, it plans to adjust operations to slower market expansion and expand exports to emerging markets.

Plan follows two years of cost negotiations

Volkswagen first boosted the possibility of closing German factories in September 2024 as sales softened in China and Europe and production costs remained elevated.

After negotiations and warning strikes, Volkswagen AG and employee representatives touched an agreement in December 2024 to eliminate more than 35,000 positions at German sites by 2030. That agreement additionally provided for a permanent reduction of 734,000 vehicles in German production capacity and annual cost savings of more than 4 billion euros from labour, structural and production measures.

In July 2026, CEO Oliver Blume told employees that another 50,000 positions could be affected after the group calculated that its costs were around 20 percent elevated than those of comparable firms. At the time, Blume stated Volkswagen was assessing the required reductions across brands, regions and businesses, Reuters noted.

The supervisory board’s approval followed negotiations involving management, employee representatives and the government of Softer Saxony, a Volkswagen shareholder.

Daniela Cavallo, chairwoman of Volkswagen’s Group and Central Works Council, described the plan as necessary but stated the cost of the restructuring should not decline solely on employees. Softer Saxony Minister-President Olaf Lies stated the firm would develop long-term options for its production sites.

Tariffs and China weigh on earnings

Volkswagen noted an operating earnings of 5.9 billion euros for the first half of 2026, down 11.6 percent from a year earlier. Its operating margin eased to 3.8 percent from 4.2 percent, while earnings after tax declined 31 percent to 3.1 billion euros, as stated by the firm’s half-year results.

The firm attributed the slide to US tariffs, weaker business in China and charges that included 500 million euros linked to the end of ID.4 production in the United States.

Blume stated in May that tariffs represented an annual burden of around 5 billion euros on Volkswagen’s operating earnings. The group’s vehicle deliveries in China declined 25.9 percent in the first half of 2026 as the wider market contracted and local manufacturers increased competitive pressure.