Automotive giant Volkswagen (VLKAF) is planning to cut 100,000 jobs and close four manufacturing plants in its home market of Germany.
Media reports say the staff cuts are equivalent to 15% of Volkswagen workforce and come as the company struggles with a sales slowdown and rising competition from Chinese automakers.
Taken together, the job cuts and plant closures represent the most radical overhaul in Volkswagen’s 89-year history.
In all, Volkswagen is reportedly planning to reduce its capital expenditures by 15% to just over 130 billion euros ($148.2 billion U.S.) in the next five years.
The German company plans to end production at its manufacturing plants in Hanover, Zwickau, Emden, and Neckarsulm.
Management at Volkswagen say the changes are needed to ensure the company’s long-term profitability.
Volkswagen had agreed a deal with its workers’ unions in late 2024 to avoid factory closures in Germany and rule out job cuts until the end of 2030.
However, it now appears that Volkswagen is speeding up that timeline, saying that the workforce reductions and plant closures are urgently needed.
The workers’ unions, General Works Council and IG Metall, have said that they will push back against the reported job cuts and plant closures.
“If such plans were to be pushed forward, we would prevent them with all our might,” said the unions in a joint statement.
Volkswagen had a global workforce of 657,400 employees at the end of this year’s first quarter.
The common stock of Volkswagen has declined 64% over the last five years to trade at 77 Euros per share.
