BERLIN — Volkswagen has set aside roughly €16 billion ($18.6 billion) to fund job cuts and potential plant closures under a landmark restructuring pact approved last week, a person familiar with the matter told Reuters on Thursday.
The figure covers Europe’s biggest carmaker’s costliest overhaul in decades as it confronts Chinese competition, tariffs and surplus factory capacity. German magazine Der Spiegel first reported the earmark; a Volkswagen spokesperson declined to comment on the cost total.
According to the reporting, up to about €10 billion would cover measures such as severance and early-retirement schemes tied to eliminating roughly 60,000 positions over time, while about €6 billion would be reserved for the possible end of vehicle production at four German plants — Emden, Zwickau, Hanover and Neckarsulm — that lack defined model plans for the 2030s. No final closure decisions have been made.
The supervisory board unanimously backed “Future Plan 2030” on September 3, adding tens of thousands of planned reductions on top of cuts already under way since late 2024. Works-council representatives have stressed that compulsory layoffs remain ruled out through 2030 under existing agreements and have framed headcount targets as planning assumptions linked to margin goals.
CEO Oliver Blume has argued the company must slim its lineup, raise efficiency and protect investment capacity even as capital spending plans are tightened. For drivers and dealers, the industrial story is the product pipeline: fewer models, a sharper EV transition and uncertainty for communities built around German assembly plants.
The cost disclosure lands as European auto makers reassess where they can still make money building cars. Volkswagen’s bet is that paying for a smaller footprint now is cheaper than defending overcapacity through the end of the decade.
Sources: Reuters; Financial Post
