Volkswagen AG's supervisory board unanimously approved a restructuring plan adding 50,000 job cuts and halving the vehicle lineup by 2035, as CEO Oliver Blume seeks to lift the operating margin from 3.8 percent in H1 2026 to 9 percent by 2030. The plan doubles total workforce reductions to 100,000 since late 2024 and addresses European overcapacity exceeding 500,000 units.
Volkswagen's supervisory board approved 50,000 additional job cuts Thursday, doubling total workforce reductions to 100,000 as it targets a 9 percent operating margin by 2030.
"This is a strong sign for the future of the Volkswagen Group," CEO Oliver Blume said. "We are taking responsibility for our entire team, for our partners and for industrial jobs worldwide."
The plan, known as the Future Plan, also calls for slimming the vehicle lineup by as much as 50 percent by 2035 and reducing offering complexity by 75 percent. Volkswagen acknowledged European capacity currently exceeds demand by more than 500,000 units annually. The company targets annual sales of about 9 million vehicles and plans €135 billion in capital expenditure and R&D spending from 2027 through 2031.
The unanimous vote gives Blume his clearest mandate yet to remake Europe's largest carmaker, which posted an operating margin of just 3.8 percent in H1 2026 as vehicle sales fell 8.4 percent and operating profit dropped 11.6 percent. Volkswagen's US depositary receipts jumped about 9 percent in New York on Thursday, the most since March 2023.
The 50,000 new cuts represent about 8 percent of Volkswagen's global workforce of roughly 652,000 at the end of last year and include management positions. The additional reductions build on roughly 50,000 job cuts agreed across Volkswagen Group brands since late 2024, matching the upper bound of the plan Blume outlined earlier this year.
The restructuring comes as Volkswagen confronts intensifying competition from Chinese automakers such as BYD that are actively expanding in European markets, alongside weak domestic demand and US tariff pressures. The company must also fund dual-track costs of maintaining internal combustion engine production while developing electric vehicle platforms, making the streamlined product portfolio central to its strategy.
The board's unanimous approval followed marathon negotiations with labor representatives and the state of Lower Saxony, which holds a minority stake and veto power over major decisions. Workers secured assurances that no factory would be immediately closed, with compulsory layoffs ruled out through the end of 2030 under existing agreements. However, Volkswagen said plants in Emden, Hannover, Neckarsulm and Zwickau lack competitive future production plans once current models phase out between 2031 and 2034, and alternative uses are being explored.
IG Metall chief Christiane Benner and works council head Daniela Cavallo said the compromise had "prevented a dangerous escalation," while stressing that no plant closing had been agreed and plans to separate the VW passenger-car and components businesses were off the table. The Porsche-Piëch family, which controls a majority of voting rights through Porsche SE, had pushed for faster action as returns and dividend flows came under pressure.
RBC Capital Markets analyst Tom Narayan called the unanimous board and union approval a "positive surprise" but emphasized execution would determine success. "We believe this decision is an important step for Volkswagen to move closer to Chinese OEMs in terms of cost competitiveness," he said.
The restructuring targets an operating result of approximately €31 billion by 2030, with €37 billion in overhead costs. Investors will watch whether Volkswagen can execute the deepest workforce reduction in its history while maintaining competitiveness against Chinese rivals that continue to gain share in Europe, with plant-level decisions expected over the coming months.
This article is for informational purposes only and does not constitute investment advice.
