Brazil in the middle? Why Volkswagen is considering laying off 100,000 workers worldwide

Volkswagen is considering the biggest restructuring in its history, with the cut of up to 100,000 jobs worldwide — about one in six positions in the group, which employs approximately 625,000 people. The measures, not yet confirmed by the automaker, were revealed by German magazine Manager Magazin and confirmed by Reuters, and include plant closures, administrative cuts, reduced investments and changes in the organizational structure.

The plan is being studied by Chief Executive Officer Oliver Blume and Chief Financial Officer Arno Antlitz after the group’s profit plunged 44% in 2025 amid advancing Chinese competition and the impact of U.S. tariffs. Among the proposals is the gradual closure of production at four plants in Germany: Volkswagen’s plants in Hanover, Emden and Zwickau and Audi’s plant in Neckarsulm would stop assembling vehicles at the end of the life cycle of current models, without an immediate stoppage.

These four units alone bring together more than 45 thousand workers who can be directly affected. The cuts would be in addition to a plan signed with the union at the end of 2024, which already foresaw the elimination of about 50 thousand jobs in Germany by 2030 – that is, the new number would double the total reduction. To date, more than 28,000 severance agreements have been signed at Volkswagen, Audi, Porsche and the Cariad software unit.

The restructuring also foresees separating the Volkswagen brand and the components division into independent companies, a move that, according to Manager Magazin, seeks to simplify management and give more flexibility to the group. The package also includes a 15% reduction in planned investments, which would fall to just over 130 billion euros (about R$ 766 billion) over the next five years.

Volkswagen did not confirm the details and said it did not comment on “confidential documents” but said the entire group “needs to undergo a profound change” to remain competitive. Blume has already declared, however, that pure and simple closure of factories is not his preferred option, citing alternatives such as producing models in Germany of Chinese design or passing units to other automakers and defense companies.

The IG Metall union and the factory council reacted and vowed to resist. In a joint statement, they said they would do everything in their power to stop any cuts — a threat with real weight, given that workers’ representatives occupy half of the seats on the supervisory board. The topic should be discussed at the collegiate meeting scheduled for July 9.