The Volkswagen Group is preparing for a massive restructuring that will slash costs by 20% across its entire portfolio of brands by the end of 2028. This move, first reported by Manager Magazin, follows earlier announcements of over 35,000 job cuts in Germany by 2030, including the closure of the Transparent Factory and the relocation of Golf production to Mexico.
Deepening Restructuring Efforts
The directive for these new cuts reportedly came from Volkswagen AG CEO Oliver Blume in January. While details are scarce, the scale of the planned reduction suggests significant measures are being considered, potentially including plant closures. Previous cost-saving initiatives at plants in Wolfsburg, Emden, and Zwickau reportedly fell short of expectations, prompting the need for more drastic action.
Addressing Market Challenges
According to a company spokesperson, earlier cost reductions have already yielded “double-digit billion-euro” savings, helping to offset the financial impacts of global tariffs and geopolitical instability. However, the deeper cuts reflect a broader challenge: Volkswagen’s aggressive push into electric vehicles has not yet met projected demand. EV adoption is slower than anticipated in many key markets, putting pressure on profitability.
Long-Term Implications
These moves signal a shift towards greater efficiency and resilience in the face of economic headwinds. The Volkswagen Group is streamlining operations to adapt to evolving market conditions, even if it means making tough decisions about production locations and workforce size. The outcome will likely reshape the company’s footprint in key automotive regions, while the EV transition continues to unfold at a more measured pace.
The Volkswagen Group is adapting to a changing market by optimizing its operations and focusing on long-term sustainability, even if that requires difficult restructuring measures.
