Europe’s largest industrial company Volkswagen may close four plants and cut up to 90,000 jobs, reports Der Spiegel citing its own sources. The decisions could be made at the company’s board meeting on Thursday.
Meanwhile, large demonstrations are taking place across Germany, including in 17 cities where Volkswagen operates. The focus is on Wolfsburg, the city that houses the automaker’s headquarters and is considered the cradle of the German automotive industry.
According to Der Spiegel, production at the plants in Zwickau and Emden is planned to be gradually discontinued over five years. After that, the plant in Hanover could close by 2032, and the plant in Neckarsulm by 2034. In total, about 40,000 people work at these four plants.
Additionally, the publication reports that CEO Oliver Blume plans to cut another 50,000 jobs and reduce investments by approximately 50 billion euros. As of the publication date, the company has not officially confirmed this information.
Historic agreement and systemic crisis
For many years, mass layoffs at Volkswagen were considered virtually impossible. The company had an agreement with trade unions from 1994 that effectively guaranteed employees protection from layoffs. However, at the end of 2024, Volkswagen announced a reduction of 35,000 jobs. Since then, as Dagens Nyheter notes, the situation has only worsened, taking on the characteristics of a systemic crisis.
A spokesman for the Volkswagen board declined to comment on the situation to Dagens Nyheter, but indicated that the board meeting could last until 18:00–19:00.
Pressure from the Chinese market and competition
One of the main reasons for the crisis is the sharp decline in Volkswagen’s position in the Chinese market, which has long been the company’s largest. Excess production capacity, aggressive price competition from Chinese automakers, and reduced profits from sales in China have intensified financial pressure. Additional factors include high production costs in Germany and the active expansion of Chinese cars in Europe.
In particular, the Chinese automaker BYD increased the number of car registrations in Europe by approximately 270% in 2025, surpassing several well-known brands. Currently, Chinese automakers control about 10% of the European car market.
Source: Dagens Nyheter
