Volkswagen CEO Oliver Blume oversees a board-approved plan to cut 50,000 jobs and reduce the company's model line by half.
Volkswagen’s board of directors approved a sweeping cost-cutting plan to address low-cost competition in China and U.S. tariffs. The plan, proposed by CEO Oliver Blume, will reduce the company's model line by approximately 50% and result in an adjustment of around 50,000 employee positions, including management roles.
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To lower fixed costs, the company will increase production volumes per model. The board stated that production at four German plants—Emden, Zwickau, Hanover, and Neckarsulm—will end, though alternative uses for these sites will be explored. The plan also includes leaner leadership structures and shorter lines of decision. Oliver Blume stated that the plan would make the company's iconic brands more attractive and competitive. Chief employee representative Daniela Cavallo noted that the plan was a necessity for the company to move successfully into the next decade. The governor of Lower Saxony, Olaf Lies, described the plan as a shared path toward necessary transformation as the company faces enormous challenges. These actions follow a 30% drop in after-tax earnings for the first half of the year due to lower sales in China.