COMMENT: Volkswagen Plans Another 50,000 Job Cuts, but Supervisory Board Dodges the Hard Decisions

Volkswagen’s supervisory board avoided the confrontation many expected. It unanimously approved a so-called 2030 future plan late Thursday, but only after postponing the most difficult disputes and referring to painful plant closures without taking a decision.

That allows the opposing sides to save face and buy time. The board confirmed another 50,000 job cuts, following a reduction of a similar size announced shortly before Christmas 2024 that has largely been implemented.

Plant closures in Germany remain unresolved. Volkswagen’s facilities in Emden, Zwickau and Hannover, along with Audi’s factory in Neckarsulm, are under consideration. The group has excess European capacity of 500,000 vehicles, leaving these sites unable to operate at competitive utilization levels. Volkswagen plans to examine alternative uses for them over the coming months.

Finding new uses would offer the best possible outcome for the company and its workforce: Volkswagen could shed unprofitable plants while giving many employees a future. Developments at Osnabrück and Dresden, where the group has been carrying out a separation process for 18 months, show that such an approach can work.

The four-page announcement described the plan as the Volkswagen Group’s most far-reaching transformation program. Yet the underlying strategy contains little that is new. The board accepted management’s aim of reducing annual production capacity to 9 million vehicles, from a previous range of 10 million to 11 million. Volkswagen wants a 9% operating margin, which the commentary says is necessary to fund heavy investment in electric mobility, digitalization and autonomous driving. By 2035, the company plans to cut its model range by about half and reduce product complexity by roughly 75%, measures intended to lower costs and agreed by the rivals months ago.