German carmaker, Volkswagen Group, has confirmed it is considering cutting up to 100,000 jobs worldwide as part of a broader restructuring aimed at reducing costs and improving competitiveness amid falling profits and weaker vehicle sales.

The company, which owns Volkswagen, Audi, Porsche, Seat, Skoda, Bentley and Lamborghini, also announced plans to reduce its vehicle lineup by about half to focus on its best-selling and most profitable models.

Chief Executive Officer, Oliver Blume, said the group is reviewing staffing levels across all its brands, companies and regions after determining that its operating costs are about 20 per cent higher than those of its competitors.

Blume said, “We are currently assessing across all brands, companies and regions how many adjustments are actually necessary and feasible.

“We need to become more efficient, more robust and simpler. We must reduce our costs.”

Volkswagen had previously announced plans to cut about 50,000 jobs in Germany by 2030, but the latest review could double that figure.

Blume also said the company has been unable to identify alternative uses for four factories in Germany that have previously faced closure.

Model range to shrink

Alongside the workforce review, Volkswagen said it will cut its vehicle range by around 50 per cent to concentrate resources on its strongest-selling models.

Blume said the move would make the company “faster, more robust and more competitive.”

The company has about 150 models across its brands. While it did not specify which vehicles would be discontinued, industry analysts expect niche models to be among the first affected, while core models such as the Golf and Polo are likely to remain central to the company’s lineup.

Profits and sales decline

Volkswagen’s operating profit has fallen sharply over the past three years, dropping from €22.6 billion in 2023 to €19.1 billion in 2024 before declining further to €8.9 billion last year.

The group has also experienced weaker sales in key markets as sales in China, once its largest market, fell 26 per cent in the first half of the year, while sales in the United States dropped by more than seven per cent, partly due to higher tariffs on imported vehicles.

The company is also facing increasing competition from Chinese manufacturers, whose lower production costs and rapid expansion in electric vehicles have intensified pressure on established European automakers.

Union opposition

Volkswagen’s latest restructuring proposals have drawn opposition from labour unions after the company’s supervisory board failed to reach an agreement on the planned job cuts.

The company had already agreed with German union IG Metall in late 2024 to eliminate 35,000 jobs at its core Volkswagen brand by 2030, alongside another 15,000 positions across its other brands. Management now says those measures are no longer sufficient given the worsening economic environment.

Workers recently staged protests outside Volkswagen facilities across Germany, while labour representatives warned they would resist additional job losses and factory closures. (Nigerian Tribune)