Volkswagen confirms weighing up to 50,000 more job cuts

BERLIN

Volkswagen's CEO has told employees a further 50,000 jobs could go at the struggling auto giant, according to an internal memo seen by AFP, confirming reports the group is targeting 100,000 cuts worldwide.

The German car titan has come under intense pressure from U.S. tariffs, slimmer profit margins from electric cars and above all intense competition in key market China, whose carmakers are now also increasingly exporting to Europe.

Last week management at the 10-brand group began what could be a long and tough process of thrashing out job cuts in talks with the supervisory board as workers protested at plants nationwide.

Chief executive Oliver Blume told workers in the memo on July 13 that the group must "act now" to safeguard its future.

"We need to become more efficient, more robust and simpler. We must reduce our costs," he said.

VW's costs are about 20 percent higher than competitors', Blume said, adding that overheads need to be cut to a "competitive level."

"As half of our overheads stem from staff costs, a theoretical calculation, assuming no change in labour costs, would result in the loss of around 50,000 jobs," he said.

This comes on top of 50,000 jobs that the carmaker is already in the process of cutting in Germany, about 35,000 of which will go at its namesake brand, under a 2024 deal with unions.

If the group were to cut 100,000 positions, it would be the biggest restructuring in the history of the global auto industry, eclipsing the 50,000 job cuts General Motors made after it declared bankruptcy in 2009.

Blume also confirmed the future of four German factories was uncertain.

"The truth is also that, as things stand today, we cannot confirm that the Emden, Hanover, Zwickau and Neckarsulm plants will be able to operate competitively into the 2030s," he said.