Volkswagen is entering a new phase of harsh restructuring in Germany, with nearly 20,000 jobs set to be cut by the end of the year, as part of an extensive cost-cutting program amid pressures in the European auto industry.
Volkswagen will reduce its workforce by 19,000 employees by 2026, according to a speech prepared by CEO Oliver Blume for the Annual Shareholders’ Meeting on June 18.
According to a document seen by Reuters, the German automaker has already committed to eliminating over 28,000 jobs by 2030 through mandatory agreements.
These measures are part of the group's strategy to enhance efficiency and adapt to the challenges facing the European auto industry, including intense competition from Chinese manufacturers, slowing demand for electric vehicles, and high production costs.
"We have reduced the costs of Volkswagen's German factories by over 20% by 2025," Blume stated in his speech.
The company is striving to improve its profitability in the domestic market, where labor and energy costs are considerably higher than in other regions.
Workforce reduction is one of the main components of the restructuring program agreed upon with employee representatives.
Volkswagen has not provided additional details on how the new staff cuts will be implemented, but the company previously indicated that it relies mainly on early retirements, voluntary departures, and efficiency measures, avoiding forced layoffs.
The German group is seeking to strengthen its competitiveness at a time when the European auto market is going through one of the most challenging periods in recent years, with traditional manufacturers forced to heavily invest in electrification and digital technologies while trying to reduce expenses.