Volkswagen's supervisory board unanimously approved a major transformation plan on Thursday that could result in another 50,000 job cuts as the automaker looks to tackle tariffs, excess capacity and growing competition from Asian rivals.
The initiative represents the most significant restructuring in Volkswagen's 89-year history. As part of the plan, the company will examine alternative uses for four German plants that currently have no confirmed production plans for the next 10 years.
The transformation strategy also proposes streamlining Volkswagen's complex corporate structure and reducing the supervisory board's role in important decisions. Unions and the German state of Lower Saxony together hold a majority on the supervisory board.
"This is a strong signal for the future of the Volkswagen Group. We are taking responsibility for our entire workforce, for our partners and for industrial jobs worldwide," CEO Oliver Blume said in a statement.
Volkswagen's management board presented the "Future Plan", which was subsequently approved by the supervisory board during its meeting. The restructuring comes as Europe's largest automaker faces mounting challenges, including US import tariffs and weak demand in the Chinese market.
The company said it needed "a further fundamental adjustment of the global workforce capacity". This would involve eliminating roughly 50,000 jobs worldwide, on top of another 50,000 positions that are already being phased out.
Volkswagen did not disclose when the additional workforce reductions would take place or explain how the job cuts would be divided among its different brands and regions.
The agreement was reached following several weeks of difficult negotiations between the management and majority owner Porsche SE on one side, and unions and Lower Saxony on the other. Volkswagen's management had even considered convening an extraordinary general meeting to secure approval for its proposals.
The automaker attributed the planned restructuring to rising competition globally, shifting consumer demand and rapid technological changes across the automotive industry.
