Volkswagen is weighing the elimination of roughly 50,000 further positions as part of a broad effort to reduce costs and narrow a competitiveness gap with other automakers. Management told employees in an internal memo on Monday that the potential reductions would add to some 50,000 job cuts already agreed across the group, including at Porsche and Audi.
According to the memo, Volkswagen has calculated a 20% cost disadvantage compared with comparable companies. That shortfall, the company said, equates to a "theoretical deduction" of another 50,000 roles globally.
"We are currently assessing across all brands, companies and regions how many adjustments are actually necessary and feasible," Blume wrote.
The internal communication follows a separate announcement last week in which Volkswagen outlined plans to reduce its model lineup by as much as half and to continue cutting manufacturing capacity. Management described those steps as part of an effort to lower costs in the face of intense competition in China and mounting pressure from Chinese automakers that are expanding into European markets.
The model-lineup contraction forms a central element of a wider restructuring proposal that was presented to Volkswagen's supervisory board last week. Under that plan, the company intends to concentrate on its most attractive market segments and to adjust production capacity so it more closely matches current demand. In a recorded message after the board meeting, Blume said, "The global situation has continued to deteriorate over the past twelve months."
These latest contemplated measures build on an agreement Volkswagen reached with its union more than 18 months ago. That earlier pact committed the company to achieving billions of dollars in cost savings and to cutting 35,000 jobs in Germany by the end of the decade, while ruling out immediate factory closures in the country. A related agreement called for 15,000 additional reductions across Audi, Porsche and the group's Cariad software division.
Under the earlier plan Volkswagen lowered overhead costs by 1 billion euros in the first quarter of this year, the memo noted, but management warned that additional steps would be required. Those further measures would include lowering manufacturing expenses, reducing overhead and accelerating technology development and decision-making.
Company executives said they are conducting a cross-brand and regional assessment to determine exactly how many job and capacity adjustments are necessary and feasible. The internal memo framed the additional potential cuts as a response to a quantified cost gap, and positioned the lineup and capacity changes as complementary tools to bring the group's cost base closer to that of its peers.
Sector impact: automotive manufacturing, labor markets, European and Chinese auto markets.