Volkswagen is considering a plan to eliminate 100,000 jobs and close four assembly plants in Germany, according to multiple media reports. The proposal, which has not been officially confirmed, would double the 50,000 job cuts previously discussed and reduce annual production capacity by roughly 500,000 vehicles. It would mark the largest single workforce reduction in the company’s history, surpassing General Motors’ 74,000 layoffs in 1991. The news has unsettled Germany’s industrial base, where the carmaker employs around 625,000 people.

The drastic measures reflect a structural crisis. Operating profit fell 53 percent in 2025 to €8.9 billion and dropped a further 14 percent in the first quarter of 2026. The company misjudged the electric-vehicle transition, arriving late with competitive models and underestimating demand for plug-in hybrids. It was effectively pushed out of the US market by tariffs, while facing intensifying competition from Chinese manufacturers such as BYD at home and abroad. The recent €10 billion sale of turbine unit Everllence to Bain Capital provides a cash cushion, but UBS analyst Patrick Hummel noted that restructuring costs could consume those proceeds, forcing the sale of other assets such as the Ducati motorcycle brand or a stock-market listing of Lamborghini.

The plan faces formidable governance hurdles. Labour representatives, who hold a majority on the supervisory board after an independent member stepped down, say they were not informed of specific job-cut targets beyond the previously agreed 35,000. Daniela Cavallo, the top union official, has been part of cost-cutting talks but insists no such escalation was presented. The state of Lower Saxony, a major shareholder, holds veto rights under the so-called VW law, making plant closures politically fraught. In Berlin, a government spokesperson said the aim is to avoid factory shutdowns and to create conditions for competitiveness, though the final decision rests with the company. By contrast, union officials in São Paulo said VW’s Brazilian operations face no immediate impact, citing a job-security agreement valid until 2028 and a growing market share that reached 18.4 percent in May.

The supervisory board convenes on July 9 to discuss the group’s strategy. The outcome will signal whether CEO Oliver Blume can overcome entrenched opposition to push through the deepest restructuring in VW’s modern history. The broader German industrial outlook is darkening: a survey by consultancy Horváth found that 60 percent of companies plan to reduce staff in Germany, with up to 100,000 industrial jobs at risk by 2026, particularly in automotive, machinery, and construction. The VW case is thus both a company-specific reckoning and a bellwether for Europe’s largest economy.