Volkswagen Considers Closing German Factories, Doubling Job Cuts

Volkswagen Group is considering what was previously unthinkable: closing up to four factories in Germany and instituting layoffs that would shrink the workforce by 15 percent.

2025 was a bad year for Europe’s largest automaker. Its sales were essentially flat, but profits were anything but, dropping 44 percent to just 6.9 billion euros ($7.9 billion) as operating margins more than halved. The red ink looks set to continue bleeding through 2026, and in March, the company announced it would cut 50,000 jobs in Germany by 2030 as part of a plan to adapt. Now, according to a report in Manager Magazin, those job losses may double.

The automaker did well selling EVs in Europe last year, but sales in North America and China fell and continue to fall, and tariffs have had a significant effect.

In April, VW Group CFO and COO Arno Arnitz told investors that the company’s operating margin was “far too low” and that it would have to fundamentally transform its business model to cut costs and increase efficiency without tanking quality. That would require “significantly reducing complexity—in our product portfolio and technology platforms, as well as in the number of entities and decision-making layers,” Arnitz said.

Now we have some idea what that reduction in complexity might look like.

The report, confirmed by Reuters, says that another 45,000 jobs would go. That would reduce VW’s total workforce by around 15 percent; currently, the automaker employs more than 650,000 people across the group’s 10 car brands and other divisions.

VW Group is part-owned by the state of Lower Saxony, which, together with strong unions, has always made the thought of factory closures in Germany anathema. But VW Group CEO Oliver Blume will present a plan to the company’s board next month that outlines just such a thing, according to the report. Volkswagen plants in Hannover, Zwickau, and Emden, as well as Audi’s factory in Neckarsulm, are all in the crosshairs.

“Please understand that we do not comment on internal, confidential documents. The underlying matters will be discussed and approved in the respective committees. We will not pre-empt this process,” a VW spokesperson told Ars.

“The Executive Board has repeatedly stated that our current business model no longer works across all brands: developing cars in Germany, producing them in Europe and exporting them to the world… The entire Group has to become significantly more competitive,” it said.