VW’s Workforce Culls and Boardroom Chaos Raise the Stakes for Key Earnings Release

Volkswagen's half-year report will test management vs. labour tensions, 50,000 job cuts, and a 36.6% China sales drop as the automaker balances cost cuts with EV launches.

All eyes are on Volkswagen’s half-year figures due July 24, with the automaker navigating a perfect storm of confirmed job cuts, a blocked board appointment, and deepening losses in its most important market. The preferred stock, which closed at €73.12 on Friday, has shed 29.8% year-to-date and sits just 5.7% above its 52-week low of €69.20 – a level hit only earlier this month. The upcoming report will test whether operational improvements can offset the growing friction between management and labour.

Tension inside the supervisory board boiled over again in mid-July when the appointment of Bosch manager Erika Rasch as new HR director was torpedoed by worker representatives. Their condition: that a new technology board seat be filled first. The move leaves a critical leadership gap at a time when CEO Oliver Blume is pressing ahead with a sweeping restructuring. The IG Metall union, already mobilising for a “hot autumn” of protests, has warned that up to 100,000 jobs could ultimately be at risk – though Blume himself confirmed on July 13 that 50,000 positions will be cut as part of a “comprehensive realignment.”

The boardroom deadlock over Rasch came just days after the supervisory board rejected management’s proposal to shutter four German plants – in Emden, Hannover, Zwickau and Neckarsulm – by a 12-7 vote. Rather than closing factories, the company is now doubling down on headcount reductions and slashing model complexity. Half of all current model variants are set to be scrapped, a move that simplifies production but raises questions about how much of VW’s trademark variety will survive.

Meanwhile, the financial pressure from China is intensifying. Second-quarter deliveries worldwide fell 8.6% to 2.08 million vehicles, with China – traditionally a profit powerhouse – suffering a 36.6% plunge to just 424,300 units. That collapse compounds the cost of the domestic overhaul and is a major reason why analysts remain split on the stock’s outlook. RBC Capital Markets retains an “Outperform” rating with a €131 target, while JPMorgan stays at “Neutral” with €110, noting a 12% order book rise since January. Deutsche Bank Research issued a “Buy” in an automated check, and Bankhaus Metzler lifted its target to €130 with a “Kaufen” recommendation.

In the midst of the austerity drive, Volkswagen has not shelved its electric-vehicle offensive. The new ID. Cross, a compact SUV on the MEB+ platform, had its world premiere on July 15 and is due to launch in autumn 2026. A week earlier, ordering opened for the “Trend” trim of the ID. Polo, priced from €24,995. The twin launches underscore the balancing act Blume must perform: investing in future models while cutting costs to defend margins against the likes of BYD.

As the half-year report approaches, investors will scrutinise how much the announced job cuts have already weighed on the balance sheet and whether the order-book improvement flagged by JPMorgan can provide a buffer. With the HR board position unfilled, a technology board still in limbo, and union protests looming, Volkswagen’s turnaround plan remains as fragile as the stock’s proximity to its yearly low.