WASHINGTON (dpa-AFX) - German automotive major Volkswagen AG announced its plan to cut anouther 50,000 jobs as part of its transformation program 'Future Plan 2030' with 12 initiatives, for significant cost savings and sustainable improvement in profitability. The firm would also half its model portfolio by 2035, aiming for more resilient and competitive operations under demanding market conditions.
In addition, the company said it will invest a three-figure billion sum over the coming years.
In the early morning trading on the Xetra in Germany, the shares were gaining around 6.80 percent, trading at 82.35 euros.
The move comes after the company recently trimmed revenue growth forecast for fiscal 2027, after reporting a sharp drop in second-quarter profit with weak production and sales volume, mainly in China.
The Board has approved the program, which represents the most strategically profound transformation initiative in the company's history, to guide operations through 2030 and beyond.
Future Plan 2030 carries 12 initiatives, such as strengthening the financial basis, focusing on the most compelling vehicles, establishing a competitive production structure, adjusting the workforce structure, further developing the North America and China businesses, and simplifying the Group structure, among others.
As part of the program, the company plans a Group-wide workforce adjustment of around 50,000 positions, including management roles.
According to the firm, a consistent alignment of workforce capacity with economic reality is essential, amid the intensifying global competition, shifting demand and technological change in the automotive industry.
The decision follows the company's previous announcement to cut around 50,000 jobs including at Porsche and Audi, totalling 100,00 job cuts by the decade.
As market conditions evolve, the company also plans for annual sales of 9 million vehicles, and an operating margin of 9 percent by 2030, which corresponds to an operating result of approximately 31 billion euros.
The company projects 37 billion euros in overhead costs and targets 135 billion euros for capital expenditure and research and development in the planning period 2027 to 2031.
By 2035, Volkswagen Group plans to streamline its model portfolio by around 50 percent and reduce its offering complexity by around 75 percent.
With the model portfolio streamline, the company expects the prioritized models to excel in design and technology and benefit from the focus on fewer variants, with higher volumes per model, and lower costs.
The firm also plans a group-wide operational excellence program, and leaner leadership structures.
Volkswagen also plans to develop a concept for a sustainable and competitive production structure for the European plants by the end of June 2027. As per the resolution, Volkswagen Group's European capacity currently exceeds demand by more than 500,000 units.
A competitive future production allocation for the Emden, Zwickau, Hanover and Neckarsulm plants cannot currently be secured on a staggered basis from 2031 to 2034, it noted. In parallel and in addition, alternative uses for these plants are being assessed.
In North America, the company plans to focus on the most profitable segments, and in China, it would adapt to revised expectations for overall growth in the Chinese automotive market and is expanding its export business toward the 'Global South.'
Olaf Lies, Minister-President of Lower Saxony, stated, 'Given international competition, the challenges facing Volkswagen and the German automotive industry are enormous. It is all the more important that we now take a shared path toward the necessary transformation. ... And politics also has to play a supporting role: We need a competitive framework and a trade policy that strengthens our industrial base in an increasingly fierce global competition.'
Separately, Volkswagen AG announced the appointment of Erika Rasch to the Group Board of Management effective October 1, 2026. She also takes on the role of Labor Director, with responsibility for Human Resources.
Further, Marianne Heiß has been appointed by court order to serve as a Supervisory Board member for Volkswagen AG until the next Annual General Meeting, effective forthwith.
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