BERLIN — Volkswagen's supervisory board on Thursday approved a transformation plan that could include cutting an additional 50,000 jobs worldwide, on top of an existing 50,000-job reduction already underway, bringing total workforce reductions to roughly 100,000 positions.
The company said the measures are necessary to address tariffs, overcapacity and competition from Chinese rivals. The initiative marks the most extensive restructuring in Volkswagen's 89-year history.
The plan outlines exploring alternatives for four German production plants—Emden, Zwickau, Neckarsulm and Hannover—that will eventually cease model production, with a staggered phase-out beginning in 2031.
The approved deal averted a confrontation with labor unions and Lower Saxony, Volkswagen's second-largest shareholder. Management had previously considered calling an extraordinary general meeting to push through its proposals against their opposition.
The restructuring will simplify Volkswagen's conglomerate structure and limit the influence of the supervisory board, where unions and Lower Saxony hold a majority, on key corporate decisions.
Volkswagen CEO Oliver Blume said in a statement, "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."
The agreement followed weeks of intense negotiations between the board and majority owner Porsche SE against the unions and Lower Saxony. Discussions about a potential spinoff of Volkswagen's passenger car and components businesses were abandoned.
Industry analyst Ferdinand Dudenhoeffer said the next 10 months will involve discussions over the future of the affected plants. "A certain sense of calm is returning, but it is far from peace," Dudenhoeffer said. "In politics, one would call it a ceasefire."
Volkswagen faces pressure from U.S. import tariffs and a weak market in China, once the group's primary revenue source.
The company did not provide specific details regarding the timeline for the new workforce reduction or how cuts would be distributed across its brands and global regions.
Frankfurt-listed Volkswagen shares closed 7.9 percent higher following the announcement, reflecting relief over the resolution of what sources indicated could have escalated into a rare crisis for Europe's largest automaker.
