Volkswagen is expected to cut 100,000 jobs in landmark downsizing
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Volkswagen reportedly plans to lay off as many as 100,000 employees worldwide in a massive downsizing that illustrates how Chinese competition is reshaping the global automotive industry.
Why it matters: European automakers are faltering in China and on their home front as Chinese automakers like BYD deliver high-quality, low-cost electric vehicles.
Driving the news: VW plans to shed nearly 1 in 6 of its global positions, according to multiple reports, including German outlet Manager Magazin and the Financial Times.
The big picture: If the company follows through and cuts 100,000 positions, it would be one of the largest layoffs in business history.
- FT noted that other huge cuts included General Motors shedding 74,000 positions in the 1990s and IBM cutting 60,000 in 1993.
- VW has only one plant in the U.S. — a facility in Chattanooga, Tennessee, where employees recently joined the United Auto Workers.
Threat level: With excess automotive production, Chinese automakers are aggressively exporting vehicles at low prices throughout the world — except the U.S. — and undermining European automakers.
- BMW issued a profit warning this month and is expected to cut 5% of its workforce.
- Stellantis announced a turnaround plan of its own as it grapples with middling sales.
- "China is gutting western automakers," as Dunne Insights analyst Michael Dunne put it.
- Chinese-brand vehicles are expected to have 17% of the European market by 2031, with particularly strong growth in Germany and France, according to AlixPartners.
By the numbers: Volkswagen — whose brands include VW, Porsche, Škoda and Audi — is by far the auto industry's largest employer with 663,000 workers as of Dec. 31. That means the company sold 13.6 vehicles per employee in 2025.
- In comparison, Toyota, the world's best-selling automaker, needed only 390,927 workers to sell 11.3 million vehicles in 2025 — about 28.9 per worker.
- That was more than twice as efficient as VW.
What they're saying: A Volkswagen spokesperson declined to comment on "confidential" matters but acknowledged the industry is "undergoing a profound transformation" and that the company's phalanx of brands "no longer works."
- The spokesperson acknowledged the impact of higher tariffs and "harder competition," saying the company is working "intensively" on a "realignment."
- "To remain successful under these conditions, we have to evolve. The entire group has to become significantly more competitive."
Yes, but: Labor restrictions in Germany could make it difficult for VW to cut as many jobs as it deems necessary.
The bottom line: Volkswagen was once the best-selling automaker in China, but those days are long gone — and now it needs to defend its position on its home turf.
Joann Muller contributed reporting.
Editor's note: This story has been updated with additional data.
