The Volkswagen Group supervisory board unanimously approved a sweeping transformation plan on Thursday that will eliminate 50,000 jobs worldwide and cut the carmaker's model lineup in half by 2035.
The Future Plan 2030, aimed at making the company more competitive, leaves the future of four German factories in doubt. The restructuring comes as Volkswagen faces rising competition from Chinese manufacturers, falling sales in China and US tariffs.
The company previously floated cutting up to 100,000 jobs. The approved figure of 50,000 includes management positions across the group, which owns brands including Audi, Porsche and Seat. The board did not specify whether the Spanish brand Seat would be affected.
The group said the automotive industry is facing the fastest and deepest transformation in its history. The new plan establishes a framework to make the group and its brands stronger, more competitive and better prepared for the future, the company said in a statement. The executive committee will now drive the necessary measures forward alongside the brands, subsidiaries and worker representatives.
Financial and production targets
Volkswagen aims to achieve a 9% operating margin by 2030, projecting annual sales of nine million vehicles. The financial targets include an operating result of about 31 billion euros and general costs of 37 billion euros. The company plans 135 billion euros in capital investments and research and development between 2027 and 2031.
The supervisory board recognized that current European capacity exceeds demand by more than 500,000 units. The company cannot guarantee competitive production for its Emden, Zwickau, Hannover and Neckarsulm plants between 2031 and 2034, and is evaluating alternative uses for the sites. A concept for European production must be developed by the end of June 2027.
By 2035, the group will simplify its model portfolio by about 50% and reduce offer complexity by 75%, focusing on higher volumes per model and lower costs. A group wide operational excellence program will pool research and development, purchasing, production, quality, sales and general costs to increase efficiency and speed.
Global strategy and structure
In North America, Volkswagen will focus on its most profitable segments. In China, the group is adapting to revised market growth expectations and expanding its export business to the Global South.
The company plans to reduce its portfolio of businesses and holdings by roughly a third, keeping only those that make a clear strategic and financial contribution to its core automotive business. Non-strategic activities will be sold or reoriented, and the real estate portfolio will be reviewed.
The board also requested a new corporate structure to speed up decision making and reduce costs across the group. A unified bonus and performance evaluation system for managers will reinforce accountability for individual results and collective performance, the company said. In addition, the supervisory board will limit its approval rights to measures of material importance for the group, aligning its thresholds with standard practice for DAX listed companies.
