A major reorganization could reshape Volkswagen’s future, putting thousands of German jobs and several historic plants at risk.

Berlin, June 26 – Volkswagen is weighing the possibility of closing four plants in Germany and a large-scale reduction of the workforce to around 100,000 employees, two people familiar with the situation said. This could be the biggest transformation in the company’s history.

The plan was brought to the attention of supervisory board members, and its discussion is planned for the July 9 meeting amid growing pressure from Chinese competitors.

The entire group, including brands and divisions, must undergo sweeping changes.

– Volkswagen Works Council and IG Metall

The closures of the Hanover, Zwickau, Emden and Audi’s Neckarsulm site could threaten more than 45,000 jobs, sources said. This would add to the 50,000 cuts agreed with unions at the end of 2024.

Oliver Blume, who has headed the company for almost four years, presented the plans to senior management this week, trying to rally management around deep cuts that are likely to meet resistance from unions and the state of Lower Saxony, where Volkswagen has its second-largest shareholder.

The restructuring was first highlighted by Manager Magazin.

The world No. 2 among automakers also plans to cut investments by about 15% and to exceed €130 billion over the next five years, the magazine reported.

Blume and the chief financial officer Arno Antlitz intend to radically restructure the 89-year-old company, including separating the core VW brand and the auto-parts operations into separate entities, the magazine reports citing sources.

Radical changes needed, VW says

A Volkswagen spokesperson declined to comment on materials described as confidential.

“The entire group, including brands and divisions, must undergo sweeping changes,” the company said.

If such plans take effect, we will do everything possible to prevent them.

– Volkswagen Works Council and IG Metall

Porsche SE, the investment arm of the Piech family and Volkswagen’s largest shareholder, also declined to comment.

In fiscal 2025, the group’s global headcount stood at 667,164 employees, almost 43% of whom worked in Germany.

VW shares were trading at a 16-year low on Friday morning, down 0.4% to 1024 GMT, signaling investor doubts about the plan’s chances of success.

STRONG PRESSURE FROM EMERGING CHINESE COMPETITORS

Blume is under pressure to regain VW’s position amid tariffs, the costly shift to electric vehicles and growing competition from Chinese automakers – perhaps the greatest threat to the company.

In China, leading electric-vehicle manufacturers are strengthening their positions, and from 2025 the market share of non-Chinese manufacturers has fallen from 57% to 32% according to ACEA.

After a long dominance in the Chinese market, Volkswagen ceded to BYD in 2024 and ended up third in 2025. This decline also affected other premium brands, notably BMW.

Chinese manufacturers are expanding their presence in Europe, and BYD, Chery, SAIC and Leapmotor increased their combined share of the European market during January–May compared with last year, and many other Chinese manufacturers plan to enter the European market soon.