Key facts
- Volkswagen plans to halve its number of vehicle models and reduce variants by up to 75% as part of a new strategy.
- The company aims to reduce annual production capacity to approximately nine million vehicles.
- Reports indicate potential job cuts of up to 100,000 employees and closure of four German plants.
- Unions have protested the potential restructuring, warning of significant conflict with management.
- Volkswagen's net profit fell 28% to €1.56bn in the quarter to March 2026.
Volkswagen has announced a significant overhaul of its operations through 2030, aiming to reduce production capacity and streamline its vehicle offerings to enhance competitiveness in a challenging global market. The strategy includes halving the number of models and cutting vehicle variants by as much as 75% to lower costs and complexity.
The announcement follows a supervisory board meeting where extensive restructuring plans were reportedly discussed. Europe's largest automaker faces pressure from U.S. tariffs, declining profit margins on electric vehicles, and intense competition, particularly in China.
As the board met, IG Metall, a major German trade union, organized protests across the country, warning of a potential major conflict with management if job cuts and plant closures proceed as rumored. Reports suggest Volkswagen is considering eliminating 100,000 jobs globally, representing over 15% of its workforce, and closing four German plants: Volkswagen facilities in Hanover, Emden, and Zwickau, along with Audi's Neckarsulm plant. These potential measures would exceed the 35,000 job cuts already agreed upon in Germany by 2030.
However, the official plan released by Volkswagen did not directly confirm these figures. Instead, the company stated it would reduce annual production capacity to around nine million vehicles, down from approximately 12 million before the pandemic and about 10 million currently, to address intensified competition. Other strategic elements include tailoring products to regional markets, matching production to demand, and simplifying the corporate structure.
CEO Oliver Blume cited a worsening global situation, including geopolitical tensions and high costs, necessitating the reduction of "excess capacity." Chief Financial Officer Arno Antlitz added that existing cost reductions were insufficient, and the company plans to significantly reduce overhead costs and improve plant efficiency.
Volkswagen currently employs about 657,000 people worldwide. The company reported a 28% drop in net profit to €1.56 billion and a 2% decline in revenue to €75.7 billion for the quarter ending March 2026.