Volkswagen CEO, Oliver Blume, warned the workforce on Monday for the first time that the group could be forced to cut another 50,000 jobs in addition to the ongoing job reduction program in Germany if it fails to substantially reduce its structural costs. The warning, contained in an internal memo addressed to employees, once again puts on the table an adjustment of similar scale to the one management tried to push through last week but was halted by the Supervisory Board.
The additional 50,000 jobs mentioned by Blume would be added to the 50,000 positions already planned to be eliminated in Germany by 2030, which would raise the potential number of jobs affected by the restructuring to 100,000. However, the CEO insisted that this is not a decision made, but a “theoretical deduction” derived from the goal of reducing administration, infrastructure, and support service costs by around 20%, which the group still considers to be much higher than those of its main competitors.
“We are currently evaluating across all brands, companies, and regions which adjustments are truly necessary and possible,” Blume states in the internal document. The executive adds that labor costs do not depend solely on the number of employees but also on the cost per worker, leaving the door open to both further workforce reductions and other measures aimed at improving productivity.
Volkswagen already has a program underway to reduce 50,000 jobs in Germany by 2030, of which 35,000 correspond to the Volkswagen brand and the rest to subsidiaries such as Audi and Porsche. According to data now provided by Blume, more than 37,000 workers have already signed exit agreements and around 27,000 will have left the group before the end of this year.
The new statements come just days after the tense Supervisory Board meeting where management presented its strategy to regain the manufacturer’s competitiveness. In the days prior, various German media reported that Blume intended to obtain the support of the highest supervisory body for a much more ambitious plan that contemplated the elimination of up to 100,000 or even 120,000 jobs worldwide and the possible closure of four German plants: Hannover, Emden, Zwickau, and the Audi factory in Neckarsulm.
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Ultimately, the Supervisory Board did not endorse that package. Instead, it approved a strategic plan composed of twelve initiatives aimed at simplifying the group’s structure, reducing model range complexity, adapting production capacity to demand, regionalizing product and technology development, and lowering structural costs. Management thus received the mandate to deepen the transformation process, but without explicit support for the drastic closure and layoff program that had leaked to the press.
The memo now sent to the workforce shows, however, that the debate is far from over. Blume maintains that Volkswagen still bears structural costs about 20% higher than comparable companies, a disadvantage he attributes to excessive internal complexity, deterioration of the business in China, and increased international competition, especially in the electric vehicle market.
Despite this, the CEO insists that his priority remains finding “smarter solutions” than factory closures. Management is studying alternatives such as production reassignment, specialization of certain plants, or seeking new industrial projects for facilities with lower workloads. However, he avoids definitively ruling out that possibility if savings measures prove insufficient.
Blume’s warnings reopen the confrontation with worker representatives and the federal state of Lower Saxony, the group’s second-largest shareholder, who already opposed the tougher plan debated last week. Although the additional 50,000 jobs remain for now a working hypothesis and not a formal decision, the CEO’s message makes it clear that management considers it inevitable to deepen the adjustment if Volkswagen wants to regain the competitiveness lost to its rivals.
