Volkswagen to Slash Workforce by 50,000 in Biggest Transformation Yet

By Mintesinot Nigussie  |  September 4, 2026

Volkswagen Group plans to eliminate about 50,000 positions worldwide as part of the biggest transformation in its history, with the German automaker seeking to cut costs, reduce excess production capacity and restore profitability amid intensifying global competition.

The company’s Supervisory Board unanimously approved its Future Plan 2030 on Thursday, clearing the way for management to implement a restructuring programme that will also reshape Volkswagen’s vehicle portfolio, production network and investment strategy.

The planned workforce reduction, including management positions, comes as Volkswagen says its European production capacity currently exceeds demand by more than 500,000 vehicles. The company is assessing the future of plants in Emden, Zwickau, Hanover and Neckarsulm, with a sustainable production structure for its European operations expected to be developed by June 2027.

Volkswagen said the workforce adjustment is necessary as changing demand, technological shifts and intensifying international competition make it essential to align staffing levels with its economic needs.

At the same time, the group plans to invest a three-digit billion-euro sum in new products, technologies and future growth areas over the coming years.

The restructuring is aimed at lifting Volkswagen’s operating margin to nine percent by 2030, equivalent to an operating result of about €31 billion. The group is targeting €135 billion in capital expenditure and research and development during the 2027–2031 planning period.

Volkswagen also plans to simplify its product range. By 2035, the group intends to reduce its model portfolio by about 50 percent and cut product complexity by around 75 percent, allowing higher volumes per model and lower production costs.

The company is targeting annual sales of nine million vehicles as part of the plan, while its investment portfolio is also expected to shrink by about one-third as Volkswagen focuses capital on businesses with a clear strategic and financial contribution to its core operations.

“We are taking responsibility for our entire workforce, for our partners and for industrial jobs worldwide,” Volkswagen CEO Oliver Blume said. “Over the coming years, we will invest a three-figure billion sum to make our iconic brands even more attractive, stronger and more competitive.”

The plan also calls for a more targeted strategy in major overseas markets. In North America, Volkswagen intends to concentrate on its most profitable segments, while in China it expects to expand exports towards markets in the Global South as it adjusts to slower growth expectations in the Chinese automotive market.

Volkswagen’s restructuring reflects mounting pressure on European automakers from weaker demand, excess manufacturing capacity and increasingly intense competition, particularly in electric vehicles and other technology-driven segments.

The company said implementation of the Future Plan 2030 will begin immediately, with employee representatives and the relevant brands and subsidiaries involved where agreements are required.

Source: FSX Business News