Key facts
- Volkswagen CEO Oliver Blume confirmed plans to cut up to 50,000 jobs globally.
- The job cuts are part of a major restructuring to improve cost competitiveness and reduce overheads.
- The supervisory board rejected a plan to shut four German factories.
- The company aims to reduce annual car production from 12 million to 9 million units.
- Unions have criticized the downsizing plans as 'unacceptable'.
Volkswagen CEO Oliver Blume has confirmed plans to cut up to 50,000 jobs globally as part of a comprehensive restructuring aimed at improving cost competitiveness. The announcement came in an internal memo to staff, detailing a plan with "12 initiatives, approximately 150 pages and 45 individual resolutions" for change. This comes despite the company's supervisory board rejecting a proposal to shut down four German factories. Blume stated that the company's overhead costs are 20% higher than comparable companies, and personnel costs account for half of these overheads, theoretically necessitating the elimination of approximately 50,000 positions worldwide. The company has already reduced its workforce by 37,000 through voluntary redundancy and partial retirement schemes, but further cuts are deemed necessary to reduce overheads. Volkswagen intends to reduce annual car production from 12 million units to 9 million, with a 2 million unit reduction already implemented over the past two years and another 500,000 units to be cut from production in China. The company is also exploring alternative uses for its factories, such as transforming the Osnabrück plant for defence production, though a plan involving Israeli defence company Rafael was reportedly blocked by Qatar's sovereign wealth fund. Unions, including IG Metall, have criticized the downsizing plans, deeming them "unacceptable" and calling for new ideas to utilize plant capacity.