Worker Anger and Board Fears: Volkswagen’s Worsening Crisis Spells 50,000 German Job Losses

Volkswagen faces an existential crisis as six of nine board members see an 'existentially threatening' position, with plans to cut 50,000 jobs in Germany by 2030, close the Osnabrück plant, and shift Golf production to Mexico.

Around 6,000 workers gathered at Volkswagen’s component plant in Baunatal on Tuesday, where the works council chief, Carsten Büchling, accused top management of a “catastrophic” communication policy. Employees often learn about crucial job decisions from the media first, Büchling said, calling the situation “a disaster.”

The outburst came as the scale of the crisis became impossible to ignore. An internal survey of Volkswagen’s nine board members found that six of them now regard the company’s position as “existentially threatening.” The leadership is pressing for a radical strategic overhaul, with costs too high and the electric-vehicle transition still unresolved. A decisive supervisory board meeting is scheduled for July 9.

Behind the rhetoric lies a stark restructuring plan. By 2030, Volkswagen intends to cut 50,000 positions in Germany, partly through voluntary departures. Production capacity will shrink by one million vehicles. At the Baunatal site, works manager Ingo Spengler tried to calm nerves, pointing to stable utilisation rates and the fact that half of all drivetrains produced there are already electric. The company recently converted 252 temporary workers to permanent contracts. Personnel board member Anika Stappenbeck also attended the meeting.

Elsewhere, the cuts are more concrete. In Kassel’s Lilienthalstraße, a lease will expire in summer 2027, forcing the closure of that facility. The 100 employees there are expected to transfer to Baunatal. At the Wolfsburg headquarters, production of the Golf model will shift to Mexico from 2027. Workers affected will receive severance packages, and a job guarantee remains in place until 2030.

Hardest hit is the Osnabrück plant, which employs around 2,300 people and is slated to close as early as 2026. A sale to Israeli defence contractor Rafael has run into resistance from Qatar Investment Authority, which holds 17% of Volkswagen’s voting rights. As an alternative, a joint venture with the state of Lower Saxony is being explored.

Audi is also deep in the throes of reorganisation. At a works meeting in Ingolstadt, the labour council demanded clear perspectives. Of the 6,000 indirect positions earmarked for elimination, 4,500 have already been cut. Labour director Xavier Ros blamed shrinking markets and new competition. The works council flatly rejects any suggestion of closing the Neckarsulm site.

The financial picture only darkens the mood. On Monday, Volkswagen’s preference shares hit a 15-year low, dipping below €80, and continued to fall to around €78.12 on Tuesday. Barclays analysts cut their price target. At Porsche, the annual shareholder meeting on Tuesday revealed a 91% profit drop to just €310 million for 2025. CEO Michael Leiters announced a radical thinning of the model lineup and about 3,900 job cuts through 2029, calling for greater commitment from the workforce.

A small bright spot: Volkswagen’s software subsidiary Cariad is consolidating its operations in Berlin. Around 1,000 employees will work from a new campus near the main train station, focusing on autonomous driving and artificial intelligence. Cariad CEO Peter Bosch acknowledged past criticism over quality and delivery performance, but said the company is now leaning more heavily on partnerships.