Cars sit parked in front of the Volkswagen plant in Zwickau, eastern Germany, on July 9, 2026.
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Volkswagen is preparing a major streamlining of its business, with management planning to sharply narrow the company’s range of models and trim production capacity. The German automaker, however, did not announce the kind of sweeping job cuts that had been the subject of speculation after tense talks with key stakeholders.
The company, Europe’s largest carmaker, said Thursday that it intends to reduce its model lineup by as much as half in the years ahead, shifting its focus toward the market segments it considers most attractive.
Volkswagen also plans to scale back annual production capacity to nine million vehicles, down from its pre-pandemic target of 12 million.
“With our future plan, we are moving into the next phase of transformation by our own means. We are making the Volkswagen Group faster, more resilient and more competitive,” Volkswagen CEO Oliver Blume said in a statement.
The announcement came after a closely watched meeting with the group’s supervisory board on Thursday. It followed reports suggesting Volkswagen was considering the closure of four German factories and as many as 100,000 job cuts.
Such a large-scale layoff program would mark the most dramatic restructuring in Volkswagen’s nearly 90-year history and has already drawn strong resistance from German politicians and influential labor unions.
Volkswagen’s labor representatives were said to have blocked a restructuring of the company at Thursday’s meeting, Reuters reported, citing two unnamed sources. Volkswagen was not immediately available to comment when contacted by CNBC on Friday.
The auto giant had already laid out plans to implement sweeping job cuts and launched a major product offensive, seeking to counter pressures ranging from U.S. import tariffs to intensifying competition from Chinese car brands.
Volkswagen employees are taking part in an information and protest event organized by IG Metall in front of the VW plant in Zwickau.
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The latest reported layoffs, however, would be double the 50,000 job cuts previously announced and now purportedly include the closure of four German plants: Hanover, Zwickau, Emden, and the Audi facility in Neckarsulm. The plans were first reported by Manager Magazin late last month.
Analysts at Jefferies said on Thursday that Volkswagen’s rescue plan provided “limited new information” and “no indication of progress” toward an agreement having been reached on either plant closure, a five-year investment plan or additional headcount reduction up to 100,000.
‘A perfect storm’
Volkswagen’s General Works Council and German industrial union IG Metall have pledged to push back against the reported job cuts and plant closures. A protest organized by IG Metall took place on Thursday outside Volkswagen’s plant in the German city of Zwickau.
Shares of Volkswagen were last seen trading 0.8% lower on Friday morning. The stock, which has recently been trading at levels not seen since the summer of 2010, is down more than 30% so far this year.
“If you look at the stock price, it tells you a story,” Henning Gebhardt, partner and fund manager at HollyHedge Consult, told CNBC’s “Europe Early Edition” on Friday.
“Volkswagen is in a perfect storm: Competition from Chinese competitors is very high so there’s no real profit from China, you have tariffs, you have other competitors which are actually having a nice offering, which Volkswagen at the moment doesn’t have, and then generally speaking, the auto industry is under pressure,” Gebhardt said.
