Volkswagen board backs plan to cut 50,000 more jobs and halve model range

Volkswagen’s supervisory board unanimously approved a sweeping restructuring of Europe’s largest carmaker on the evening of 3 September 2026, ending weeks of confrontation between management, unions and the German state of Lower Saxony. The programme, called Future Plan 2030, includes a reduction of about 50,000 positions worldwide and leaves open the future of four factories in Germany.

In a statement issued from its Wolfsburg headquarters after the meeting, the company called the plan “the most strategically profound transformation program in the Volkswagen Group’s history”. Chief executive Oliver Blume said: “This is a strong signal for the future of the Volkswagen Group. We are taking responsibility for our entire workforce, for our partners and for industrial jobs worldwide.”

What the plan contains

The plan is built on a smaller Volkswagen. The group now plans for annual sales of nine million vehicles and has set a target of a 9% operating margin by 2030, which it said corresponds to an operating result of about €31 billion. It budgeted €135 billion for capital spending and research and development between 2027 and 2031.

By 2035 the group intends to cut its range of models by around half and reduce the complexity of what it offers by around 75%, concentrating on vehicles that can be built in higher volumes at lower cost. Its portfolio of shareholdings and side businesses is to shrink by around a third.

On jobs, the company said that “a Group-wide workforce adjustment of approximately 50,000 positions – including management roles – will be necessary”, beyond existing programmes. Reuters reported that this comes on top of a 50,000-job reduction already under way, and that Volkswagen gave no details of timing or of how the cuts would be spread across brands and regions.

Four plants without a guaranteed future

The most sensitive passage concerns factories. The supervisory board formally acknowledged that Volkswagen’s European capacity exceeds demand by more than 500,000 vehicles, and that competitive future production for the plants in Emden, Zwickau, Hanover and Neckarsulm “cannot currently be secured on a staggered basis from 2031 to 2034”. Alternative uses for the sites are being examined, and a plan for the European production network is due by the end of June 2027.

No closure was decided. The trade publication electrive reported that more than 40,000 people work at the four sites. Zwickau and Emden build only electric cars, Hanover is the base of Volkswagen’s commercial vehicles arm, and Neckarsulm belongs to the Audi brand.

How a compromise was reached

Volkswagen’s supervisory board is unusual in that unions and the state of Lower Saxony, the company’s second-largest shareholder, together hold a majority on it, Reuters noted. According to electrive, citing the business daily Handelsblatt, Lower Saxony owns 20% of the company, has extensive veto rights under a law specific to Volkswagen, and had opposed a proposal to spin off the core Volkswagen brand. Blume had failed to win approval for the plan at a first attempt in July.

Reuters reported that the idea of spinning off the passenger car and components businesses was no longer mentioned in the final deal, and that the agreement shelved a scenario in which management would have called an extraordinary shareholder meeting to push its plans through against workers and the state. In return, the board agreed to limit its own approval rights to matters of significance for the group as a whole, in line with common practice among large German listed companies.

Labour leaders endorsed the result while keeping their distance from the way it was reached. Daniela Cavallo, who chairs the works council, said in the company statement that the plan was necessary “without placing the burden of that transformation solely on employees”. In a separate joint statement quoted by electrive, she and Christiane Benner, head of the IG Metall union, said management’s approach in recent weeks had been “not constructive” and stressed that “no plant has been abandoned”.

Investors welcomed the outcome. Volkswagen shares closed 7.9% higher after the news, Reuters reported. The agency described the company as squeezed between US import tariffs and a weak Chinese market that was once its main source of profit. Industry analyst Ferdinand Dudenhoeffer told Reuters the agreement was closer to a ceasefire than to peace: “That’s a good thing, because now the focus can be on the business.”