Volkswagen’s supervisory board approved a major transformation plan on Thursday as the automaker faces tariffs, excess capacity and growing competition from Chinese rivals.
The restructuring represents the most extensive overhaul in Volkswagen’s 89-year history and will include another 50,000 job cuts worldwide.
The company said it needs to make a fundamental adjustment to its global workforce capacity to address continuing business pressures.
The additional reductions will come on top of 50,000 job cuts already underway across the group.
Volkswagen did not disclose when the new reductions would occur or how the cuts would affect individual brands and regions.
Meanwhile, the plan will examine alternatives for four German plants that could lose their vehicle models during the next decade.
The facilities in Emden, Zwickau, Neckarsulm and Hannover face staggered model phase-outs from 2031 onward.
Restructuring eases conflict with unions
The agreement also reduces the risk of a major confrontation between management, unions and Lower Saxony, Volkswagen’s second-largest shareholder.
It will simplify Volkswagen’s corporate structure and reduce the supervisory board’s influence over some key decisions.
Volkswagen CEO Oliver Blume described the plan as a strong signal for the group’s future.
He said the company would take responsibility for its employees, partners and industrial jobs worldwide.
Following the announcement, Volkswagen shares closed 7.9% higher in Frankfurt, reflecting investor relief over the agreement.
Analyst Ferdinand Dudenhoeffer said the next 10 months would focus on discussions about the four German plants.
He described the agreement as a ceasefire rather than a lasting peace between management and labour representatives.
Volkswagen faces pressure from US tariffs and weak demand in China, once a major source of growth and profits.
The company now aims to reshape its operations while managing competition and challenging conditions across key global markets.
