Volkswagen Shreds Management Layers and Scraps €1.5 Billion Driverless Car Pact in Twin Overhaul
Published on 07/03/2026 at 17:12 | Redaktion boerse-global.de
Volkswagen is executing one of the most sweeping restructurings in its history, slashing thousands of management jobs and simultaneously pulling the plug on a costly autonomous-driving alliance with Bosch. The moves underscore the depth of the crisis gripping Europe’s largest carmaker as it battles weak sales, shrinking margins, and a stock that has lost nearly a third of its value this year.
The company will eliminate 5,500 management positions, reducing the leadership corps from 21,500 to 16,000. The old system of multiple committees and overlapping ranks is being replaced by a four-level model designed to shorten decision-making chains and sharpen accountability. Chief Executive Oliver Blume is driving the shake-up as the carmaker’s business performance continues to falter.
Alongside the management cuts, Volkswagen is also unwinding its four-and-a-half-year partnership with Bosch in automated driving. The alliance, which had jointly invested around €1.5 billion through the carmaker’s software subsidiary Cariad, will formally end on July 1, 2026. The breakup follows reports of sluggish progress in developing self-driving systems, and the company said the market and technology landscape in Europe had shifted significantly since the deal was signed.
Blume’s strategy is pivoting away from in-house development toward external procurement of hardware and software for autonomous driving. He still aims to bring highly automated driving to Europe and North America, but now with an emphasis on speed and rapid scaling. The engineering work done with Bosch will not be wasted: Volkswagen plans to integrate the jointly developed technology into future models, including the ID.Every1, which is slated to start production in Portugal in 2027.
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The Cariad works council has voiced alarm at the change, warning that the company is at risk of losing critical know-how and future value creation to outside suppliers. The management restructuring, meanwhile, must still be approved by the supervisory board, and the bonus overhaul tied to it could prove contentious.
That overhaul represents a radical departure from Volkswagen’s traditional compensation logic. Currently, variable bonuses are driven mostly by corporate-wide metrics. Under the new system, the individual performance share of the bonus will more than double, rising from 13 to 17 percent to 35 percent. A three-tier evaluation system covering goal achievement, behavior, and impact will be used, and top performers will be highlighted via a so-called "Impact Index." A separate "savings bonus" is also being considered to ensure that high restructuring costs do not torpedo bonus targets, thereby preserving motivation for painful cuts.
The management downsizing is only one piece of a broader belt-tightening. The carmaker is preparing to reduce its annual production capacity from 12 million to 9 million vehicles, and media reports suggest up to 100,000 jobs globally could be at risk.
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At the stock exchange, the preference shares have shown some relief from deeply oversold levels. On Friday, the stock rose 1.28 percent to €74.12, after closing at €73.18 the previous day. That is about 7 percent above the 52-week low of €69.20 set on July 1. However, the shares remain roughly 32 percent below the 52-week high of €109.10 touched in mid-December 2025, and the year-to-date loss stands at 30.14 percent. The 200-day moving average sits at €94.22, more than 20 percent above the current price.
Technical indicators still point to a market that sees considerable risk in the carmaker’s transformation. The relative strength index (RSI) came in at 33.0 on Friday, suggesting the stock is still in oversold territory, while the 30-day annualized volatility has run at 31.26 percent. Investors are clearly pricing in uncertainty as Volkswagen attempts to juggle a management purge, a software strategy reversal, and the potential for massive job cuts — all while trying to revive a share price that has been cut in half from its peak.
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