Reports emerged that Volkswagen is preparing to slash up to 100,000 jobs globally and shutter four German factories — a restructuring of historic scale that the automaker blames on a sluggish electric vehicle transition, ballooning costs, and softening European demand. Shares have drifted lower over the past week, falling from $80.32 to $76.26, but the muted 5% decline suggests markets either anticipated the pain or doubt the plan will be executed in full. Volkswagen Plans to Gut 100,000 Jobs and Close Four Factories — But Can Europe's Biggest Automaker Actually Push It Through?
Reports emerged Friday that Volkswagen CEO Oliver Blume is preparing the most radical restructuring in the company's 89-year history — cutting up to 100,000 jobs, shuttering four German plants, and potentially breaking up the corporate empire. Shares have slid from $80.32 to $76.26 over the past week, a surprisingly tame 5% drop that suggests investors either saw this coming or doubt the plan survives union opposition.
• The Old Cuts Weren't Enough, So Management Doubled Down. A union deal struck in late 2024 had already set a target of eliminating around 50,000 positions. Now the proposed total has doubled. In Q1 2026, net profit slumped 28% to €1.56 billion, and revenue fell 2% to €75.7 billion — prompting CFO Arno Antlitz to warn that "the cost savings planned so far are not enough." The earlier round of cuts was clearly insufficient to right-size a cost base built for a combustion-engine era that is fading.
• China Is Slipping Away, and Tariffs Are Piling On. Antlitz has put the annual cost of U.S. tariffs at roughly €4 billion, while China — the group's single largest market — saw first-quarter sales tumble 20% as domestic rivals, especially BYD, seized share. For years Volkswagen dominated the Chinese car market, but it was overtaken by BYD in 2024 and slipped to third place in 2025. Losing pricing power in the world's largest auto market while absorbing billions in tariff costs creates a two-front squeeze on margins that no efficiency program can easily fix.
• Breaking Up the Empire Could Unlock — or Destroy — Value. Both the core VW passenger-car brand and the components division would be spun off and turned into independent companies, potentially making it easier to list individual businesses on the capital markets.
VW shares have lost almost 60% of their value since Blume became CEO nearly four years ago , so the logic is that separating faster-growing units from struggling ones might attract investors. The risk: losing the group's purchasing and engineering scale.
• The Unions Hold a Veto — and They're Already Fighting. VW's General Works Council and IG Metall pledged to push back, saying, "If such plans were to be pushed forward, we would prevent them with all our might."
The state of Lower Saxony, Volkswagen's second-largest shareholder, could also oppose the restructuring. The supervisory board meets July 9 to formally discuss the plan, but Germany's co-determination laws give labor enormous blocking power. Investors should watch that date closely: what emerges will determine whether this is a genuine transformation or another watered-down compromise.