The world's second-largest automaker, Germany's Volkswagen, plans to cut up to 100,000 jobs and shut down production at four factories in the country, significantly accelerating its cost-cutting plans as the company seeks ways to survive the rapid advance of Chinese rivals, especially BYD.
The company had already presented a plan to cut 50,000 jobs in Germany by the end of 2030. According to Volkswagen, this means a reduction in production capacity of 500,000 cars in its home country.
According to information from the Financial Times , this latest plan to double the number of layoffs was confirmed by a source familiar with the matter, also based on reporting by the German magazine *Manager Magazin*. The factories to be closed will be in Hanover, Zwickau, Emden, and at the Audi plant in Neckarsulm.
The restructuring measures come a day after the announcement of the sale of 51% of its marine engine unit, Everllence, to the American private equity firm Bain, for US$8.4 billion.
With over 16,000 employees, Everllence manufactures large engines used to operate ships and power plants. It also develops large-scale heat pumps that can help cities and industrial facilities decarbonize their heat supply.
Volkswagen CEO Oliver Blume has been seeking to simplify the sprawling group, which owns brands such as Porsche, Audi, and Lamborghini, to focus on its core automotive business. The goal is to sell more assets to raise capital.
European manufacturers have been hit hard by the rapid entry of Chinese automakers, which accounted for almost one in ten new vehicles sold in the region in the first five months of the year, according to the European Automobile Industry Association.
"The risk level has never been higher, and it continues to rise," Blume said last week during the company's annual general meeting.
Volkswagen, which declined to provide details about the new plans, is expected to present the measures to the company's board on July 9th. "The underlying issues are discussed and approved by the relevant government bodies. We will not anticipate this process," VW stated.
According to the *FT*, the plan also includes reducing the volume of planned investments by about 15% over the next five years, to approximately US$148 billion.
Blume has faced pressure to revive Volkswagen, which is grappling with tariffs, a turbulent transition to electric vehicles, and increasing competition from automakers in the Asian country.
Major manufacturers have been progressively losing ground to electric vehicles produced in China. According to the consulting firm AlixPartners, the market share of non-Chinese automakers will fall to 32% in 2025, compared to 57% in 2020.
After being China's leading automaker for years, Volkswagen was overtaken by BYD in 2024, falling to second place and then to third place in 2025.
Volkswagen's factory council and the German trade union IG Metall have vowed to resist any such measures. "Should these plans go ahead, we will do everything in our power to stop them," they stated in a joint declaration on Friday, June 26.
Porsche SE, the investment vehicle of the Porsche and Piech families and Volkswagen's largest shareholder, also declined to comment.
In the 2025 financial report, the group's global workforce was 667,164 people, with almost 43% of employees in Germany, which corresponds to almost 290,000 workers.
On Friday, June 26, Volkswagen shares were down 1.34% at 2:15 PM (local time) on the Frankfurt Stock Exchange. Year-to-date, the company has fallen 27.8%. The automaker has a market capitalization of €42 billion.
