Volkswagen Approves Overhaul of About 50,000 Positions, Strikes Preliminary Osnabrueck Deal

Key Facts

Volkswagen Group's supervisory board unanimously approved its Future Plan 2030, which assumes a worldwide workforce adjustment of about 50,000 positions, including management roles and beyond programs already under way.

The 50,000 figure is not a finalized schedule of compulsory layoffs. The works council described it as a planning assumption linked to cost and profitability targets, while existing agreements continue to rule out compulsory layoffs through the end of 2030. Talks with employee representatives will begin where measures require their agreement.

The group links the overhaul to annual sales of about 9 million vehicles and a 9% operating margin by 2030, implying an operating result of roughly €31 billion and overhead costs of €37 billion. It also targets €135 billion of capital expenditure and research and development spending during 2027-2031.

The plan calls for reducing the model portfolio by about 50% by 2035 and cutting offering complexity by about 75%. Volkswagen says fewer models and options should raise volume per model and spread fixed costs across more vehicles.

Volkswagen says its European production capacity exceeds demand by more than 500,000 vehicles a year and that Emden, Zwickau, Hanover and Neckarsulm currently lack secured competitive production allocations on a staggered basis between 2031 and 2034. A sustainable European production blueprint is due by the end of June 2027, while alternative uses for the sites are assessed.

Osnabrueck provides a practical example of that approach. Volkswagen, Lower Saxony and Aurelius Capital agreed key terms for a possible sale of Volkswagen Osnabrück GmbH, with Aurelius set to hold a majority stake alongside the state. Volkswagen had already decided to end vehicle production at the site in summer 2027.

The prospective owners plan to develop Osnabrueck gradually into a center for security and defense solutions. An initial project with Rafael Advanced Defense Systems could manufacture air-defense systems and components for Germany and Europe. The transaction aims to preserve most employment, and the works council said more than 1,200 employees would gain a future at the site.

For investors, the Osnabrueck agreement tests whether Volkswagen can address excess capacity without immediately closing plants. The next steps include defining responsibilities and the new company's economic and organizational structure and preparing for a possible ownership transfer, while the final scale of the workforce adjustment remains subject to implementation and negotiations.