The company has not set a final number, yet one widely discussed figure shows how far its transformation could go.

Volkswagen is preparing for a sweeping review of its costs and production structure amid intensifying competition and declining profitability. Volkswagen CEO Oliver Blume said in an internal address to employees that the automotive industry’s problems will only worsen in the coming years.

The company is undergoing the largest restructuring in its history. It could involve the additional elimination of around 50,000 jobs worldwide, as well as the possible spin-off of certain divisions as part of the group’s structural review.

Volkswagen is facing several challenges at once: the aggressive entry of Chinese competitors into the European market, weaker financial results in China, US import tariffs, and excess production capacity in Europe.

The situation is more than critical. The current margin of less than 4% is good under the present circumstances, but it is by no means enough to provide sufficient funding in the long term for new technologies, new products, and our facilities.

– Oliver Blume

Volkswagen’s administrative costs exceed those of its competitors

According to Oliver Blume, Volkswagen’s indirect and administrative costs remain more than 30% higher than those of comparable automakers. He stressed that reducing these costs is essential to maintaining the group’s competitiveness.

Volkswagen’s supervisory board is expected to continue discussing the transformation plan on September 4. Before then, Blume plans to visit Volkswagen facilities that have been placed at risk by the current business turnaround program.

50,000 jobs not described as a final target

Volkswagen has not officially specified the exact scale of the new job cuts. However, the figure of 50,000 jobs, which has been widely discussed, could effectively double the workforce reduction already planned.

The figure of around 50,000 jobs worldwide that is often mentioned is not a fixed target. It stems from our cost target relative to competitors and serves as an indicator of the scale of action required.

– Oliver Blume

In July, Volkswagen unveiled plans to significantly reduce its model range and further cut production capacity. The group’s controlling families have also increased pressure on management and other decision-makers, insisting on decisive restructuring measures.

Problems with factory utilization in Germany

Oliver Blume noted that Volkswagen plants in Emden, Hanover, Zwickau, and Neckarsulm are unlikely to reach competitive capacity utilization levels even in the 2030s.

At the same time, no final decisions have been made regarding the closure of specific facilities. Some sites have already made progress in improving efficiency, but these changes are insufficient, especially given pressure from Chinese manufacturers expanding their presence in Europe.