Volkswagen Considers Major Restructuring Plan Amid Global Shift Toward Electric Vehicles

German automaker Volkswagen faces one of its biggest restructuring drives in decades as it considers closing several factories in Germany and reducing its global workforce by tens of thousands. The proposal includes the possible shutdown of four production sites in Germany , a move that could impact over 100,000 positions over time reported Germany-based Manager Magazin. Quoting people familiar with the discussions, Manager Magazin reported that Volkswagen has reviewed the possibility of shutting plants in Hanover, Zwickau, Emden, and Audi’s Neckarsulm facility. These locations together employ more than 45,000 workers. The company already agreed with unions in late 2024 to cut around 50,000 jobs. The new proposals could significantly expand that figure. Senior executives received the restructuring plan earlier this week from Volkswagen chief executive Oliver Blume, who seeks to align management on deep cost reductions. A spokesperson for the company told Manager Magazin that the group must undergo major changes to stay competitive. “The entire group, including its brands and subsidiaries, must undergo far-reaching change,” the spokesperson said. Volkswagen faces several challenges simultaneously. The company deals with higher production costs in Europe, a global shift toward electric vehicles, and stronger competition from Chinese automakers that offer lower-priced EVs. The automaker also reviews a major investment reduction plan. Manager Magazin and Reuters reports suggest Volkswagen may cut planned investments by around 15% over the next five years, bringing total spending to just over €130 billion. The restructuring plan also includes discussions about separating parts of the core VW brand and related operations into different business units. This move aims to improve efficiency and speed up decision-making within the group. Union leaders in Germany have strongly opposed the proposed changes. The works council and the IG Metall union said they will resist any attempt to close plants or cut large numbers of jobs. “We would do everything in our power to prevent such plans,” the union representatives said in a joint statement, as reported by Manager Magazin. Headquartered in Wolfsburg Volkswagen remains one of Germany’s largest employers, with over 667,000 workers worldwide, reported Reuters. Nearly half of them work in Germany, making the restructuring politically sensitive. Shares of Volkswagen traded near multi-year lows as investors reacted cautiously to the news. Market concerns also grew over the company’s ability to execute such a large overhaul while maintaining production stability. The company’s leadership faces pressure to deliver results as competition intensifies. Chinese automakers such as BYD have gained significant ground in both domestic and global markets, reducing Volkswagen’s earlier dominance. Volkswagen, once China’s top carmaker, has slipped in ranking in recent years as local brands expanded. Analysts say the shift in China now affects not only mass-market brands but also premium automakers across Europe. Industry data shows non-Chinese automakers have steadily lost market share in China over the past five years. This trend has forced global carmakers to rethink production, pricing, and investment strategies, reported Reuters.