VW's Restructuring Crossroads: 100,000 Jobs at Stake as Labour Costs Threaten a Second Wave of Cuts
Published on 08/17/2026 at 08:11 | Redaktion boerse-global.de
Volkswagen is heading into a late-summer showdown with its workforce that could determine the trajectory of its most ambitious cost-cutting drive in decades. Labour representatives are demanding clarity from chief executive Oliver Blume on whether an additional 50,000 positions could be eliminated if wage costs fail to come down — on top of the 50,000 job cuts already planned through 2030.
The confrontation comes at a delicate moment for Europe's largest automaker. First-half operating profit fell 11.6 percent to €5.9 billion, with margins compressing to 3.8 percent. Global deliveries dropped 8.4 percent to roughly four million vehicles, while Chinese sales in the second quarter tumbled 36.6 percent year-on-year. The company has already lowered its 2026 revenue guidance to between minus 3 and 0 percent, having previously projected growth of up to 3 percent.
Works meetings set the stage for September board decision
Works council gatherings are scheduled across four German sites in late August — Wolfsburg on the 25th, Emden and Zwickau on the 26th, and Hannover on the 31st. Management has acknowledged that the Emden, Hannover, Zwickau and Neckarsulm plants no longer have guaranteed capacity utilisation. The supervisory board is expected to revisit the restructuring plans in September, when it will consider formal approval for plant closures slated for 2031 through 2034.
The stakes are considerable. Up to 100,000 positions could ultimately be affected under current board proposals, according to reports, with the previously announced reduction of 50,000 additional roles by 2030 forming the baseline. Blume had set a target at June's annual general meeting to shrink the German workforce by 19,000 positions by the end of 2026. Across the Volkswagen, Audi, Porsche and CARIAD brands, more than 28,000 employees have already signed departure agreements valid through 2030.
Porsche SE, which controls 53.3 percent of voting rights as the dominant shareholder, is pressing for faster restructuring. A rescue package presented in July failed to win approval in the supervisory board, falling short by a 12-to-7 vote.
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Investment budget slashed as capital discipline tightens
Alongside the headcount reductions, Volkswagen is reining in its capital expenditure programme. Planned investment for 2027 through 2031 has been cut from €180 billion to €135 billion — a clear signal that the group is reordering its capital allocation as profitability comes under pressure.
The operational picture, however, is more nuanced than the headline numbers suggest. The core Volkswagen brand — the so-called Brand Group Core — actually improved its first-half operating result to €3.6 billion, a 4.5 percent gain year-on-year. Group-level earnings were dragged down by roughly €0.5 billion in costs tied to production stoppages of the ID.4 in North America, among other factors.
There are bright spots in electrification. The new ID.Polo family has attracted more than 70,000 orders within weeks of launch, and European EV orders rose 50 percent in the second quarter. Yet the broader market tells a different story: in the EU, petrol and diesel vehicles accounted for 30.3 percent of new registrations in the first quarter, while pure electric cars captured just 19.4 percent.
Combustion comeback and US expansion run in parallel
Wolfsburg is responding pragmatically to that demand picture by running extra shifts for conventional models. Sixteen additional assembly shifts are scheduled for the Tiguan, Golf, Touran and Tayron, alongside further shifts in body construction and the paint shop. The company has also brought hybrid versions of the Golf and T-Roc to German pre-sale, with the Golf Hybrid starting at €41,400 and offering 125 kW — equivalent to 170 horsepower — without external charging capability.
Across the Atlantic, Volkswagen is deepening its bet on American electric mobility. The group has become the largest shareholder in Rivian with a 15.9 percent stake, surpassing Amazon's roughly 13 percent holding. Through a joint venture focused on electric vehicle architectures, VW can invest up to $5.8 billion, while Rivian prepares a more affordable SUV model called the R2 for the US market.
On the financing side, the leasing subsidiary VW Credit has issued $1.5 billion in asset-backed securities through the Volkswagen Auto Lease Trust 2026-A, collateralised by new-car lease contracts with an average FICO score of 774. Fitch and S&P awarded top ratings to the senior tranches.
Shares remain mired in a persistent downtrend
The market's verdict on Volkswagen's transformation efforts remains cautious. The preferred shares closed Friday at €73.88, up 0.9 percent on the day, but that gain does little to offset a 1.8 percent decline over the previous seven trading sessions. The stock sits roughly 19 percent below its 200-day moving average of €91.46 and has lost 29 percent since the start of the year. At current levels, it trades about 32 percent below its 52-week high of €109.10 reached in December.
For investors, September looms as the decisive moment. Only once the supervisory board finalises its position on plant closures and job reductions will it become clear how deep the group's restructuring will actually cut — and whether the core brand's operational improvement can withstand the broader corporate headwinds. The late-August works meetings will offer an early indication of whether management can break the internal deadlock that has so far stalled the turnaround.
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