Volkswagen Group Internal Memo Reportedly Calls For Doubling Layoffs

To say the Volkswagen Group is in a pickle would be an understatement. The fact that it’s moving Golf production outside Germany by relocating its most important product to Mexico from 2027 speaks volumes about the cost problems the automotive giant is facing. To cut expenditures, it’s also eliminating as many as half of its models and slashing the number of options by 75 percent. It’s also cutting 50,000 jobs across its multiple brands and reducing annual vehicle production by one million.

But that doesn’t seem to be enough to put the VW Group back on track. While the company isn’t confirming reports about closing as many as four factories, another rumor related to its downsizing efforts is gaining traction. As German media reported over the last few days, the layoffs could double to 100,000 over the coming years. Reuters has seen an internal memo circulating within the company, which warns of a “theoretical deduction” of 50,000 additional jobs across the Group.

The news agency cites CEO Oliver Blume lamenting that the VW Group’s costs are 20 percent higher than those of similarly sized automakers. While the head honcho is against plant closures, the memo paints a grim future for the four German plants that Manager Magazin mentioned in late June as at risk of closure.

Photo by: Audi

'As of today, we still cannot confirm competitive use cases for the plants of Emden, Hanover, Zwickau, and Neckarsulm in the 2030s.'

Emden is where the ID.4, ID.7, and ID.7 Tourer EVs are built, while Hanover assembles the Transporter/Caravelle, ID. Buzz, and the Multivan/California. As for Zwickau, it produces the ID.3, ID.4, and ID.5, along with the Audi Q4 E-Tron, Q4 Sportback E-Tron, and the Cupra Born. Neckarsulm is Audi’s plant and builds the A5, A6, A8, and the E-Tron GT.

As for how the VW Group could avoid closures, there have been reports about keeping the lights on by assembling Chinese cars at the underutilized plants. Alternatively, the company is looking for a partner in the defense industry. It’s worth noting the automotive juggernaut already closed two factories in 2025: Brussels (Q8 E-Tron, Q8 Sportback E-Tron) and Dresden (ID.3).

Blume allegedly told employees the VW Group hasn’t fully fleshed out the expanded cost-cutting plan. Meanwhile, the CEO’s public statement released a few days ago hints at radical changes ahead:

'We are making the Volkswagen Group faster, more resilient and more competitive: through less complexity, focused technologies, an even stronger alignment of products, development and production with regional markets, the reduction of overcapacities, a streamlined equity portfolio and significantly leaner structures.'

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Source: Volkswagen

Motor1's Take: As dire as the situation may look at the VW Group, it has the strength to get back on its feet. It remains a force to be reckoned with in Europe, where Volkswagen and Skoda are the two best-selling automakers through May. Elsewhere, the Group grew by eight percent in South America during the first half of the year, so it’s not all doom and gloom.

That said, the situation in China cannot be ignored. Demand fell by a whopping 25.9 percent in the first six months of 2026, making it clear the VW Group no longer resonates with local buyers, who continue to flock to better-equipped, lower-priced cars from domestic brands.

Problems At The VW Group:

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