Das Auto hits the brake: VW axes 60,000 jobs in “last-chance” rescue bid

Executives warned that Europe’s biggest carmaker could slip into losses without an immediate change of course, and Volkswagen approved its toughest rescue plan in its 89-year history, according to Bild newspaper.

«Today we decide the survival of the Volkswagen Group,» said an internal memo seen by the media outlet. The language is extraordinary for a company that employs around 663,000 people worldwide, including 284,000 in Germany, and remains the historic backbone of the country’s car industry.

Bild reported that about 95% of the management proposal survived negotiations. Volkswagen’s supervisory board later confirmed unanimous approval of the resulting Future Plan 2030.

The confidential proposal called for 47,200 job cuts across VW brands, regions, and management. An additional 13,000 jobs could go if the group cannot otherwise close a €3.4bn ($4bn) gap in its overhead-reduction programme.

Volkswagen’s survival math

After delivering a record 10.97 million vehicles in 2019, the company expects only 9 million sales by 2030. If VW did nothing, that sales volume would result in a 0.1% operating margin and a €200 million ($232 million) operating loss in 2030, according to the confidential plan.

VW management prefers a 9% margin and a €30.6bn operating result. The gap must be closed by €30.9bn ($35.9bn), indicating how far executives believe the business has strayed from sustainable profitability.

Read more: BMW cuts thousands of jobs worldwide as VW and Mercedes follow suit

VW plans to invest €135bn ($157bn) in capital and research between 2027 and 2031, down €50bn ($58.1bn) from previous plans.

Half the models and one historic marque to go

Volkswagen responded to the crisis by forming a smaller, more centralised group. By 2035, it plans to cut model range by 50% and technical and customer-facing complexity by 75%.

Moving development to cheaper locations could reduce engineering work by 35%–50%. Outsourcing, shared-service centres, and AI will reduce costs in administration, production, sales, and quality control.

Some familiar names may go too, as the document removes Seat from Volkswagen’s 2030 strategy and suggests closing it by 2029. Brand growth would continue for Cupra.

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