- Volkswagen Group has already announced plans to cut 50,000 jobs.
- An internal memo seen by Reuters reportedly calls for doubling that figure to 100,000.
- CEO Oliver Blume told employees that VW Group’s costs are 20% higher than its rivals.
To say that Volkswagen Group is in trouble would be an understatement. The fact that it is moving Golf production out of Germany by moving its most important product to Mexico from 2027 speaks volumes about the cost problems facing the automotive giant. To cut expenses, it is eliminating more than half of its models and reducing the number of options by 75 percent. It is cutting 50,000 jobs across several of its brands and reducing annual vehicle production by one million.
But this does not seem to be enough to get the VW Group back on track. Although the company is not confirming the reports of closure of four factories, another rumor related to the company’s downsizing efforts is gaining momentum. As German media have reported over the past few days, layoffs could double to 100,000 in the coming years. reuters An internal memo has been seen circulating within the company, warning of a “principled cut” of 50,000 additional jobs across the group.
The news agency quoted CEO Oliver Blume as saying that VW Group’s costs are 20 percent higher than similarly sized automakers. While major plants are against closure, memo points to a grim future for four German plants manager magazine Threat of closure was reported at the end of June.
Photo by: Audi
‘To date, we still cannot confirm competitive use cases for the plants in Emden, Hanover, Zwickau and Neckarsulm in the 2030s.’
Emden is where the ID.4, ID.7, and ID.7 Tourer EVs are built, while Hanover assembles the Transporter/Caravel, ID. Buzz, and Multivan/California. As for Zwickau, it produces the Audi Q4 e-tron, Q4 Sportback e-tron and Cupra Born as well as the ID.3, ID.4 and ID.5. Neckarsulm is Audi’s plant and produces the A5, A6, A8 and E-Tron GT.
There have been reports of how the VW Group could avoid closure to keep the lights on by assembling Chinese cars in underutilized plants. Alternatively, the company is looking for a partner in the defense industry. It’s worth noting that the automotive juggernaut has already closed two factories in 2025: Brussels (Q8 e-tron, Q8 Sportback e-tron) and Dresden (ID.3).
Blume reportedly told employees that the VW Group had not fully implemented the extended cost-cutting plan. meanwhile, CEO’s public statement Hints of upcoming radical changes released a few days ago:
‘We are making the Volkswagen Group faster, more flexible and more competitive: through reduced complexity, focused technologies, even stronger alignment of products, development and production with regional markets, reduction of excess capacities, a streamlined equity portfolio and significantly leaner structures.’
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Source: Volkswagen
Motor1’s Opinion: No matter how dire the situation is for the VW Group, it has the strength to get back on its feet. It remains a major force in Europe, where Volkswagen and Skoda were the two best-selling automakers during May. Elsewhere, the group grew eight percent in South America during the first half of the year, so it’s not all doom and gloom.
He said, China’s situation cannot be ignored. Demand fell by a massive 25.9 percent in the first six months of 2026, making it clear that VW Group is no longer in sync with local buyers, who flock to better-equipped, lower-priced cars from domestic brands.
