Volkswagen Group‘s (OTC: VWAGY) supervisory board unanimously approved 50,000 more job cuts worldwide Thursday, confirming the roughly 100,000-position total that leaked planning documents outlined over the summer.
Volkswagen and labor agreed to 50,000 job cuts in late 2024. That figure alone accounts for roughly 8% of the company’s global headcount, and the combined total is close to 15%. CEO Oliver Blume called the vote a strong signal for the company’s future and tied it to plans for sharper, more competitive brands.
Volkswagen’s works council and IG Metall, the union representing much of Germany’s auto sector, spent June and July calling the plan reckless and pledging to block it outright. By Thursday, works council chairwoman Daniela Cavallo called it “a necessity to lead our Group successfully into the next decade.”
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IG Metall’s leadership publicly rejected a WirtschaftsWoche report describing management’s search for a way around the board’s veto power over plant decisions. Labor holds half of Volkswagen’s board seats, and a 1960 law governing the company’s privatization requires a two-thirds vote for any new or relocated plant. Together, those two facts have let unions effectively block factory closures for decades. Thursday’s deal breaks that impasse, directing management toward a new governance model that loosens those thresholds in exchange for labor’s support now.
Read: Volkswagen Plans to Cut 100,000 Jobs and Close Four German Plants
The four German plants, in Emden, Zwickau, Hanover and Neckarsulm, are no closer to a confirmed fate. Volkswagen says it cannot guarantee production into the 2030s and is evaluating alternative uses for the sites, but both sides say the board has approved no closures. More than 45,000 workers across the four sites have faced potential redundancy since closures first came under consideration.
The restructuring commits Volkswagen to cutting its model lineup roughly in half by 2035, on capacity that runs 500,000 vehicles a year ahead of demand in Europe. Volkswagen paired the cuts with a 9% operating-margin goal for 2030 and a multiyear investment commitment topping €135 billion.
Also read: Volkswagen Scraps €1.5 Billion Bosch Self-Driving Deal as Restructuring Widens
Chinese automakers’ share of the European market roughly doubled from a year earlier through May, adding to pressure on Volkswagen’s position back home in China. The company also faces an estimated $4.7 billion to $5.8 billion in US tariff costs this year. Porsche SE (OTC: POAHY), which controls Volkswagen, has separately pressed management on cost discipline following its own writedowns on the investment.
Related: China Is Exporting Cars at a Record Pace, Even as Its Own Car Buyers Disappear
Volkswagen’s US-listed shares jumped more than 9% to close at $9.40 Thursday, a sign investors cared more about ending months of boardroom deadlock than about the scale of the job losses.
