Volkswagen to Shrink Workforce by 50,000 and Model Lineup by 50%
Volkswagen board approved its biggest restructuring plan in years, and 50,000 jobs are on the line.
Volkswagen’s supervisory board unanimously approved a sweeping overhaul of the company. The plan includes cutting 50,000 more jobs by 2030 and halving the group’s model lineup by 2035.
This is one of the largest restructurings in Volkswagen’s history, and it comes at a difficult moment for the company. VW Group’s operating profit fell 54% in 2025, mainly due to US tariffs and growing competition from Chinese automakers. CEO Oliver Blume has said the group’s operating return could fall as low as 4% this year. The new plan aims to lift that margin to 9% by 2030.
Volkswagen has already agreed to eliminate 35,000 positions in a December 2024 deal with the IG Metall union. And now 50,000 more employees are at risk. Together, the two rounds bring planned workforce reductions since late 2024 to 85,000 jobs, or 8 % of VW’s global employees for the new round alone.
Importantly, the company has ruled out compulsory layoffs through 2030 under its existing job security agreement. Volkswagen plans to reduce its workforce through voluntary redundancy, early retirement, and natural attrition, rather than forcing people to quit.
Four German plants are now without a secured future:
- Emden
- Hanover
- Neckarsulm (Audi)
- Zwickau
None of these plants are closing immediately. Management now has until June 2027 to present a viable production plan for each site. If no new products or roles are found for them by that deadline, closures become more likely.
Beyond jobs, the plan targets Volkswagen’s product complexity. The group intends to cut its overall model lineup by 50% by 2035. VW will also reduce the number of different trims and configurations offered for each car model by 75%. This applies across the entire VW Group, including Volkswagen, Audi, Porsche, Skoda, SEAT, Cupra, Bentley, and Lamborghini.
Fewer models and fewer variants should lower engineering and manufacturing costs, but it also means fewer choices for customers going forward.
Several pressures pushed Volkswagen toward this decision, such as:
- Sales in China have declined as local EV makers, including BYD, take market share both at home and increasingly in Europe.
- High labor and energy costs in Germany have made domestic production less competitive.
- US tariffs have further strained profits.
- Europe currently has around 500,000 vehicles worth of unused production capacity, according to the company.
Blume has argued that Volkswagen’s traditional model, building cars in Germany for export around the world, is no longer economically sustainable given these shifts. As part of the plan, VW is also slashing capital spending for 2027 through 2031 by 16%, to 135 billion euros, and redirecting funds toward electric vehicles, batteries, and software.
VW management did not impose this restructuring. IG Metall union chief Christiane Benner and VW group works council chief Daniela Cavallo both said the agreement prevented a more damaging escalation. They confirmed that no plant closures were agreed to in this round and that earlier proposals to break up or sell off parts of the business were dropped.
That framing matters. It suggests Volkswagen’s leadership wanted a harsher plan in July and had to negotiate it down to reach unanimous board approval in September.
The clearest deadline ahead is June 2027, when Volkswagen must show a real plan for its four plants with production secured. Whether the company can hit its 9% margin target by 2030, while cutting jobs and models at the same time it invests heavily in EVs and software, will be the real test of whether this plan works.
