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Plan discussed for July 9 may affect units in Hanover, Zwickau, Emden, and Neckarsulm amid Chinese pressure, European demand drop, and union resistance
Volkswagen is considering closing four factories in Germany and expanding cuts to up to 100,000 jobs, said two people familiar with the matter, according to an article released by Reuters. The plan, which may be discussed on July 9, comes amid pressure from Chinese rivals, tariffs in the United States, and a drop in demand in Europe.
Plan may affect four factories in Germany
The factories mentioned are Hanover, Zwickau, Emden, and the Audi unit in Neckarsulm. Together, they would put more than 45,000 jobs at risk, according to the sources.
This number would add to the 50,000 cuts already planned by the automaker. In absolute terms, the dismissal of 100,000 people and the closure of four assembly plants would represent the largest restructuring in the history of the automotive industry.
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Volkswagen’s supervisory board members have been informed about the plans. The proposal is expected to be discussed at a meeting scheduled for July 9.
Chinese pressure and demand drop weigh on Volkswagen
The automaker states that its business model has become unsustainable amid a set of pressures.
Among them are the growing competition from Chinese rivals, high tariffs on car imports to the United States, and the drop in demand in Europe.
In China, Volkswagen has lost ground. After leading the market for years, it was overtaken by BYD in 2024 and fell to third place in 2025.
The share of non-Chinese automakers in the Chinese market fell from 57% in 2020 to 32% in 2025, according to AlixPartners.
Unions and Lower Saxony promise to resist
The Volkswagen works council and the IG Metall union have promised to resist the measures. In a joint statement, they stated they would do everything in their power to stop the plans if they proceed.
The German state of Lower Saxony, the second-largest shareholder of the automaker, also positioned itself against it. The state prime minister said he would not agree with the plan.
Volkswagen’s governance structure gives significant influence to worker representatives and Lower Saxony, which could make restructuring more difficult.
Investments may also be reduced
Manager Magazin first reported on the restructuring. The publication also stated that Volkswagen would reduce its investments by about 15%, to just over €130 billion, or $148 billion, over the next five years.
CEO Oliver Blume and CFO Arno Antlitz also plan to restructure the 89-year-old company, including separating the main VW brand and parts operations into distinct entities.
Volkswagen shares were trading at 16-year lows on Friday, down 3.4% at 13:35 GMT.
Criticism points to weak sales as the central problem
Ingo Speich, from Deka, a Volkswagen shareholder, told Reuters that high costs are just a symptom. For him, the main cause is weak sales.
Volkswagen stated, through a spokesperson, that it would not comment on confidential documents. The representative said that the entire group, including brands and subsidiaries, needs to undergo profound changes.
In the 2025 financial year, the group’s global workforce was 667,164 people. Almost 43% were employed in Germany.
This article was prepared based on information from Reuters and Manager Magazin, with data, numbers, and statements preserved as per the consulted material.
