Volkswagen plans to lay off another 50,000 employees; CEO launches a new round of cost reforms.

```

Volkswagen CEO Oliver Blume has revealed a plan to cut up to 50,000 more jobs worldwide, marking the largest cost restructuring action ever taken by Europe's biggest car manufacturer.

According to Bloomberg, Blume stated that Volkswagen’s management expenses are about one-fifth higher than its competitors; to achieve cost parity, theoretically about 50,000 positions would need to be eliminated.

This figure is in addition to the target of 50,000 job cuts already initiated in the layoff plan for 2024, meaning the scale of layoffs would double compared to the original plan. Meanwhile, four factories in Germany are facing the risk of closure.

The plan has met strong opposition from labor unions and has not received initial support from the board. Falling sales, American tariffs eroding profits at Audi and Porsche, and a weak European market are combining to force this automotive giant, which employs more than 657,000 people, to accelerate structural reforms.

Cost pressure drives double-size layoff plan

Blume plainly stated in a memo that Volkswagen’s workforce has “grown continuously for decades and has now reached an unsustainable level,” attributing the dilemma to changes in the market landscape and uncontrollable external factors, and saying that the negative impact “amounts to hundreds of billions of euros.”

To control spending, Volkswagen last month sold a 51% stake in its marine engine subsidiary Everllence, raising about 7.4 billion euros (roughly 8.5 billion dollars).

Blume said Volkswagen holds over 2,000 equity stakes and business assets, calling this an “important area of transformation,” and stating the company plans to review which assets truly serve its core automotive business and shareholder returns. Its holdings include the Ducati motorcycle brand and shares in American solid-state battery manufacturer QuantumScape.

Four German factories face closure risk

The four German factories currently at risk are located in Emden, Hanover, Zwickau, and Neckarsulm.

Blume left room for maneuver in his memo, stating that there are “smarter choices than directly closing factories” when dealing with high costs and declining demand.

He also noted that average costs at German factories have fallen by 20% over the past year, which he finds “encouraging,” but admitted he is “still unable to confirm whether each factory has competitive capacity allocation”—that is, it is not yet clear which models will be produced at which factories.

Blume already stated last month that relying on the traditional business model of developing and exporting cars domestically in Germany “is no longer viable.” Against the backdrop of a similarly sluggish European market, Volkswagen’s high fixed costs and idle factory capacity have become increasingly prominent, forcing the group to accelerate structural adjustments on a larger scale.

Risk Warning and DisclaimerThe market is risky, and investments should be made with caution. This article does not constitute personal investment advice and does not take into account the special investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are appropriate for their specific circumstances. Investments based on this article are at your own risk. ```