wolfsburg – Volkswagen CEO Oliver Blume told the automaker’s global workforce on Monday that Europe’s largest automaker may need to cut an additional 50,000 jobs on top of the 50,000 already agreed under a 2024 restructuring deal, effectively confirming for the first time that Volkswagen is targeting a total cut of closer to 100,000 jobs, or roughly one in six of its 630,000 employees worldwide.
The revelation came in an internal memo sent by Blom to employees at Volkswagen, and seen by Reuters. This followed demonstrations at several German factories last week, with employees demanding management explain restructuring plans that were rejected by the supervisory board at a meeting on Thursday after workers’ representatives voted against them.
Bloom framed the additional cuts as a “theoretical discount” required to close what the company calculates as a 20 percent cost disadvantage compared to similar automakers. “We are currently evaluating how many adjustments are actually necessary and possible across all brands, companies and regions,” he wrote. The memorandum included the entire Volkswagen Group, which includes Porsche, Audi, Seat, Skoda, Lamborghini and Bentley alongside the core brand.
Four German plants are named directly: Emden, Hannover, Zwickau, and the Audi plant in Neckarsulm. “To date, we are still unable to confirm competitive use cases for the stations in the 2030s,” Bloom wrote. The language stopped announcing lockdowns. The company said it favored what Blum called “smart solutions” and put forward two alternatives: reusing idle capacity of European defense contractors expanding as part of a rearmament drive on the continent, or shifting Volkswagen models originally designed for the Chinese market to underutilized German assembly lines.
The memo arrived days after workers staged demonstrations across German facilities, mobilized by IG Metall in what the union described as the broadest simultaneous protest on a factory floor in Volkswagen’s post-war history. IG Metall CEO Christiane Boehner issued a direct warning: “If these plans come to fruition, we will stop them with all our might.” The 2024 agreement, which resulted in the initial 50,000 cuts, also carried commitments to maintain German factories until 2030. The Blum memorandum does not formally repudiate those commitments, but its logic is difficult to reconcile.
The Volkswagen crisis brings together three structural pressures. US tariffs imposed in 2025 are expected to cost the group approximately 5 billion euros annually. In China, where Volkswagen has had a dominant position for four decades, deliveries fell to their lowest level since 2011, as local manufacturers led by BYD grabbed market share faster than European automakers had envisioned. As Euronews I mentionedHowever, profit margins on electric vehicles remain negative across most of the group’s lineup, a structural gap that has widened rather than closed as new models hit the market.
The ownership structure creates institutional constraints that most multinational corporate restructurings do not face. The state of Lower Saxony has a 20 percent stake in the Volkswagen Group and a stake blocked by the Volkswagen Act, an old arrangement dating back to the company’s post-war founding that gives regional politicians effective veto power over major structural decisions. Labor representatives already have a majority on the supervisory board after the recent resignation, and the board’s vote on Thursday reflects an alliance between state interests and workers allied against Blom’s proposals.
His decision to convey the scale of the restructuring directly to employees rather than through the board of directors may reflect his belief that internal pressure from workers who understand the company’s cost position could change the dynamics that have hampered his proposals. An earlier Supervisory Board vote rejected management restructuring plans as the standoff between Blom and workers entered a more public phase.
None of the alternatives proposed in the memorandum carry a committed timetable. The defense sector proposal reflects broader European calculations that car factories idled by the shift to electric vehicles may find new buyers among defense manufacturers rearming themselves across the continent, but no binding contracts have been disclosed. The reversal of the Chinese model flies in the face of the economic logic that drove VW to manufacture in China in the first place, where labor costs and proximity to the market made local production the dominant model for three decades.
Germany’s other major automakers face versions of the same structural problem. BMW posted its biggest quarterly profit decline in years in May. Mercedes-Benz has twice cut its earnings guidance for 2026. The country’s auto industry, once the foundation of Germany’s high-wage, export-driven economy, is simultaneously undergoing the slowest electrification transition in the developed world and the highest exposure to tariffs among major auto markets.
The CEO’s proposal for 100,000 job cuts, which was first outlined internally in June, has now been put directly before the workforce in writing for the first time. The Supervisory Board is expected to meet again for further restructuring discussions, but no date has been set publicly. Until that meeting leads to an outcome, Monday’s memo is the clearest signal Volkswagen’s leadership has put to workers and investors about how much change the company believes it needs to remain competitive. Whether labor representatives will coalesce against him before the board reconvenes is a question neither the CEO’s memo nor the union’s warnings have answered.
