Key facts
- Volkswagen's board approved the 'Future Plan 2030' restructuring initiative.
- Approximately 50,000 jobs will be cut by 2030.
- Auto production will end at four German plants: Emden, Zwickau, Hanover, and Neckarsulm.
- The company aims to reduce its model range by 50% and complexity by 75% by 2035.
- Volkswagen targets a 9% operating margin by 2030.
Volkswagen's supervisory board has approved a sweeping restructuring plan, dubbed 'Future Plan 2030,' aimed at enhancing efficiency and competitiveness amid challenges from low-cost Chinese competition and U.S. tariffs. The plan mandates the elimination of approximately 50,000 jobs across the group by 2030, including management roles, and will halt auto production at the company's plants in Emden, Zwickau, Hanover, and Neckarsulm. Volkswagen cited excess production capacity in Europe, estimated at 500,000 vehicles annually, as a reason for the plant closures.
The initiative also includes a 50% reduction in the company's model range and a 75% decrease in complexity by 2035, with a target of achieving a 9% operating margin by 2030. The company plans to invest 135 billion euros ($157 billion) in capital spending and research and development between 2027 and 2031. The plan faced resistance from employee representatives but was supported by the regional government, which holds a stake in the company. Volkswagen reported a 30% drop in after-tax earnings for the first half of the year as sales took a hit in China.