Volkswagen AG (ETR:VOW3) is reportedly considering a dramatic restructuring that could involve cutting up to 100,000 jobs, shuttering four German plants, and slashing its five-year investment plan by roughly €23 billion to just over €130 billion. The news, reported by Manager Magazin, underscores a deepening liquidity challenge at Europe's largest automaker as its operating margin remains well below the 2030 target of 8% to 10%.
The proposed job cuts would represent approximately 15.2% of Volkswagen's global workforce of 657,400 as of March 2026. If implemented, the reduction would improve the company's deliveries-per-employee ratio from 13.7 to 16.1, based on 2025 deliveries of 8.98 million vehicles. However, such calculations are simplistic, as the workforce includes software, services, and China joint ventures.
Volkswagen's first-quarter operating return on sales stood at just 3.3%, far below the 8% to 10% target set for 2030. CFO Arno Antlitz called the margin "far too low" in April, adding that "planned cost reductions are not enough." He emphasized the need to reduce complexity in products, technology platforms, and corporate structure.
The investment cut is a key element of the plan. The previous five-year budget of about €153 billion is being trimmed by 15%, freeing up cash for the balance sheet but limiting funding for new plants, software development, and future models. Volkswagen has said it is still rolling out new vehicles, including the ID. Polo, ID. Cross, Cupra Raval, and Škoda Epiq, but faces soft EV demand.
The reported plan would nearly double the scale of cuts already underway. Volkswagen had previously committed to 50,000 job reductions by 2030 across group companies, with binding agreements covering over 28,000 departures. The company said factory costs at German sites are expected to drop by more than 20% in 2025.
According to Manager Magazin, production at Volkswagen's Hanover, Zwickau, Emden, and Audi's Neckarsulm plants would cease when current model cycles end. This would challenge a 2024 union agreement that prevents plant closures this decade, a stance labor leaders reaffirmed in May.
Beyond workforce adjustments, Volkswagen is pursuing broader structural changes. Reuters reported that the group has tapped Bain Capital to acquire a 51% stake in its engine subsidiary Everllence, a deal expected to generate €7.4 billion. Volkswagen shares rose up to 3% on the news. The automaker has not yet decided how to deploy the proceeds.
Manager Magazin also reported that CEO Oliver Blume and CFO Arno Antlitz are considering splitting Volkswagen's main brand and its parts-making sites into standalone businesses. Such a move could provide investors with greater transparency on the cost base and cash requirements of the VW brand. Volkswagen has not confirmed this plan.
The broader market context adds pressure. Volkswagen's first-quarter margin of 3.3% highlights the gap between current performance and long-term goals. Soft demand in China and North America, coupled with weak EV adoption, means that labor cuts alone will not suffice. The investment reduction, while preserving cash, risks slowing the company's transition to electric and software-defined vehicles.
Volkswagen's shares traded on Xetra during the dateline, with markets open from 0900 to 1730 CEST. The stock saw an intraday gain of up to 3% following the Everllence news, but the broader restructuring plan signals a pivotal moment for the automaker as it navigates a challenging transition.
