Volkswagen to cut an extra 50,000 jobs in major restructure

(Sharecast News) - Volkswagen said it would go ahead with the biggest restructure in its 89year history, announcing plans to cut around 50,000 extra jobs and halve the number of models produced as it confronts mounting pressure from Chinese rivals, high energy costs and the expensive shift to electric vehicles.

The move followed tense negotiations with unions representing the company's more than 650,000 workers worldwide, with labour leaders ultimately backing the deal.

Volkswagen had already agreed to reduce its workforce by about 50,000 by 2030, with deals reached with 37,000 employees so far. The latest plan lifts the total cuts to around 100,000, or around 15% of the workforce.

The company has been hit hard by China's rise as the world's dominant car and EV producer. Its Chinese sales have slumped, while cheap Chinese imports have eroded output at German factories and the ongoing Iran war has seen energy costs surge.

Volkswagen said it has far more manufacturing capacity than it needs, leaving the fate of four German plants earmarked for possible closure still uncertain.

Chief executive Oliver Blume warned that the car maker's sites in Emden, Hanover, Zwickau and Neckarsulm lacked a clear future beyond 2030, saying the company "cannot carry that disadvantage indefinitely."

He noted that some factories could avoid closure by being repurposed for defence production as Germany boosts spending to counter Russia's military threat.

Blume has also stressed that Volkswagen must rein in costs, which he said remain about 30% higher than those of comparable rivals.

Reporting by Frank Prenesti for Sharecast.com