Historic restructuring plan at Volkswagen - Up to 100.000 jobs could be eliminated
Volkswagen, Europe's largest carmaker, could be forced to cut another 50,000 jobs to keep up with rivals in a highly competitive and rapidly changing global car market, according to an internal memo sent to employees by the group's CEO, Oliver Blume. The document officially confirms for the first time that the German manufacturer is considering cutting up to 100,000 jobs worldwide.
A 20% cost difference compared to the competition
This new round of massive restructuring comes in continuation of a plan already agreed at group level, which foresees the elimination of approximately 50,000 jobs, including within the Porsche and Audi divisions.
However, the previous measures are no longer considered sufficient to ensure long-term viability. Volkswagen management estimates that it has a cost disadvantage of around 20% compared to its main direct competitors. To compensate for this gap and streamline the financial structure, internal calculations show that a further 50,000 jobs will need to be eliminated from the group's global network.
The factors that triggered the structural crisis
Oliver Blume is trying to fundamentally reorganize the German giant's business, whose profits have been severely affected in recent years by a series of major crises:
- Brutal competition in China: The Chinese market, which was the group's main profit driver, has transformed rapidly. Local electric vehicle makers, supported by integrated supply chains and much lower production costs, have captured significant market share, forcing VW to engage in an aggressive price war.
- Logistics costs and customs duties: New tariff barriers and billions of euros in customs duties imposed globally have put huge pressure on the group's profit margins.
- Rigidity of the German production network: Factories in the home market operate with high fixed costs and strict union regulations, making adaptation to new market realities extremely slow and costly.
Market reaction: Historical lows on the stock market
Volkswagen's deep troubles are directly reflected in its performance on financial markets. The company's shares have fallen to their lowest level since July 2010, significantly underperforming its main European rivals. The sharp decline reflects investor disbelief in the group's current ability to manage the transition to electric vehicles without sacrificing profitability.
The restructuring efforts led by Oliver Blume mark a turning point for Volkswagen, which is under pressure to abandon its traditional job security model to survive in an industry dominated by efficiency and speed of adaptation.