Volkswagen is drawing up plans to eliminate up to 100,000 jobs worldwide and to end production at four German plants, according to internal documents seen by the business weekly Manager Magazin. The proposal, which would be the most far-reaching restructuring in the company’s 89-year history, doubles the 50,000 job cuts already announced for 2030 and would affect roughly one in six of the group’s 657,000 employees. Alongside the headcount reduction, the management board is considering closing the Volkswagen factories in Hanover, Zwickau and Emden, as well as the Audi plant in Neckarsulm, once current model cycles end.

The acceleration is driven by a convergence of pressures that have eroded the group’s profitability. Net profit fell 28 per cent in the first quarter of 2026, while Chinese manufacturers such as BYD have expanded their share of the European electric-vehicle market to nearly one in ten new cars sold. At the same time, the group faces higher energy costs following the decoupling from Russian gas, the drag of US import tariffs, and a slower-than-expected consumer shift to electric vehicles. “Our current business model no longer works in its present form for all brands,” a Volkswagen spokesman said, pointing to the difficulty of designing cars in Germany, producing them in Europe and exporting them worldwide.

The plan, championed by CEO Oliver Blume and CFO Arno Antlitz, goes beyond workforce cuts. It envisages reducing capital expenditure by about 15 per cent to just over €130 billion over the next five years and cutting overheads by €11 billion by 2030. The management is also examining a separation of the core Volkswagen brand and the components business into standalone entities, a move intended to speed up decision-making and sharpen accountability. The proposals were discussed by the management board this week and are expected to be presented to the supervisory board on 9 July.

Reaction from labour representatives was immediate and combative. The works council and the IG Metall union said the reports were “rightly alarming our workforce and the regions where our sites are located” and pledged to do everything in their power to block any plant closures. Their leverage is substantial: worker representatives hold half the seats on the supervisory board, and the state of Lower Saxony, a major shareholder with two seats, has historically aligned with union positions. A job-security agreement in place until at least 2030 further complicates any compulsory redundancies at German sites.

Volkswagen has declined to comment on the internal documents, stating that “the relevant bodies must still examine and approve” any measures. The 9 July supervisory board session is the next concrete milestone, though the company has cautioned that the figures may change during negotiations. For European industry, the scale of the proposed cuts signals that even the continent’s largest carmaker now views its legacy cost structure as incompatible with the competitive realities of a market being reshaped by Chinese entrants and trade fragmentation.