Volkswagen’s Workforce at a Crossroads: Blume Flags Up to 100,000 Potential Job Cuts as Board Blocks Overhaul

Volkswagen's CEO warns 100,000 jobs could be cut as supervisory board blocks cost-saving plan, sending shares near 52-week low amid falling sales and profits.

The boardroom battle at Volkswagen escalated this week after the supervisory board voted down chief executive Oliver Blume’s latest restructuring blueprint on July 9, while the CEO simultaneously warned that up to 100,000 jobs could eventually be on the line if the carmaker fails to close a 20% overhead-cost gap with rivals. The double blow has driven the preferred stock to within 3% of its 52-week low and fuelled a fresh wave of uncertainty for the 40,000 workers at five German plants awaiting clarity.

Blume, in an internal memo to staff, revealed for the first time a concrete figure: up to 50,000 additional positions could disappear globally unless labour costs improve. Combined with the 50,000 German jobs already slated for reduction under a 2024 agreement, the total potential headcount loss reaches 100,000 — roughly one in six of the group’s more than 657,000 employees worldwide. The supervisory board, where worker representatives and the state of Lower Saxony hold sway, refused to approve the broader cost-cutting programme, pushing the next decisive meeting to September.

The CEO has publicly ruled out outright plant closures, insisting he prefers “intelligent solutions” such as partnerships outside the traditional automotive business — including potential defence contracts — despite internal reports that concrete closure dates are already circulating for the Zwickau, Emden, Hannover and Neckarsulm sites. Meanwhile, the works council has accused the board of fostering distrust through its communication strategy and plans to hold mass meetings after the summer break. The voluntary exit programme is already in full swing: 37,000 German employees have signed severance agreements, with 27,000 expected to leave by the end of this year. An additional 5,000 management positions are earmarked for elimination by 2030.

The urgency of the restructuring is underscored by deteriorating operating numbers. Second-quarter deliveries fell 9% year-on-year to 2.08 million vehicles, with China — Volkswagen’s largest market — collapsing 34% to just 424,300 units. Net profit had already slumped 28% in the first quarter, US tariffs are costing the group up to €5 billion annually, and European overcapacity is estimated at 500,000 units. Blume acknowledged internally that while the models are popular, they are not profitable enough. He plans to slash the model range by up to 50% and reduce options on remaining vehicles by 75%, while cutting production capacity to 9 million units per year. A rare bright spot is the ID.Polo electric family, which garnered more than 50,000 orders in its first four weeks. The sale of a 51% stake in battery joint venture Everllence also brought in €7.4 billion, providing a short-term cash buffer.

The market is repricing the stock accordingly. Volkswagen’s preference shares traded at €71.30 Monday, a marginal daily gain of 0.34% but down 5.49% on the week and 32.80% since the start of 2026. The shares are now only 3.03% above the 52-week low of €69.20 touched on July 1, and stand 34.65% below the December 2025 high of €109.10. Technical signals remain bearish: the stock sits 14.97% below its 50-day moving average and 23.89% below the 200-day average, while the relative strength index of 31.1 points to oversold conditions. Annualised 30-day volatility of 32.38% reflects the deep unease among investors as the boardroom impasse drags on.

Volkswagen is not alone in its distress. The IG Metall union in Baden-Württemberg has begun mobilising against job cuts at Mercedes-Benz, Porsche and Audi, staging car convoys and works meetings in Sindelfingen — a sign that the cost-cutting wave is sweeping the entire German auto industry. Investors now await Volkswagen’s full half-year report on July 23, which will reveal the financial damage and may set the stage for the next round of the boardroom confrontation in September. Until then, the standoff over Blume’s vision and the fate of up to 100,000 jobs will keep the shares pinned near their lows.