China eats German's auto business for lunch?

In case you're wondering what will happen if China becomes the dominant player in AI and Data Centers.

Volkswagen Warns It May Need to Cut 50,000 More Jobs

German automaker seeking to cut costs amid growing competition from China

By Stephen Wilmot, WSJ

July 13, 2026 11:01 am ET

Volkswagen said it might have to cut 50,000 more jobs in an effort to align its costs with those of other major carmakers.

View more

Volkswagen VOW3 0.65%increase; green up pointing triangle said it might have to cut 50,000 more jobs in a renewed drive to bring costs into line with those of other big carmakers.

In an internal memo published Monday, Chief Executive Oliver Blume said the automaker was evaluating possible workforce adjustments across its various brands and regional subsidiaries. Blume also said he couldn’t guarantee the future of four German plants.

“Europe is under massive economic and geopolitical pressure. Germany, as an export nation, is particularly affected. And in the automotive industry, the challenges appear as if under a magnifying glass,” Blume said in the memo, which was reviewed by The Wall Street Journal.

Volkswagen’s traditional business model of developing cars in Germany to sell around the world has been upended by rising costs in Europe, new tariffs in the U.S., and the emergence of globally competitive Chinese technology.

Blume’s comments mark the first time Volkswagen has discussed the potential human and operational impact of a broad restructuring plan that executives shared with the company’s supervisory board on Thursday.

After the high-stakes meeting, Volkswagen said it wanted to cut the number of models it offers in half and reduce capacity but didn’t explain specifically what that meant for the company’s operations. That prompted a wave of union pressure for Blume to reassure staff after press reports about potential factory closures and job losses.

The latest cost-cutting measures come on top of the 50,000 job cuts already negotiated with labor representatives for its namesake brand as well as key subsidiaries including Audi and Porsche.

Progress in reducing the workforce has so far been slow, with the company relying on early retirement programs and voluntary layoffs to keep peace with the union. At the end of last year, Volkswagen still employed about 660,000 workers, roughly one for every 14 cars it sold.

Blume said Monday that the company had a 20% cost disadvantage to its peers in the administration, infrastructure and other functions that support its core operations. Closing the gap without cutting pay would theoretically reduce staffing by 50,000, he said.

“Our personnel numbers in the group have grown over decades to a scale that is no longer sustainable today,” Blume said in the memo.

Blume suggested that fewer job losses could be required if pay were cut instead. He said North America represented a growth opportunity.

Meanwhile, Blume said Volkswagen couldn’t yet confirm plans to bring its factories at Emden, Hannover, Zwickau or Neckarsulm to a competitive capacity level in the 2030s, putting them at risk.

But he said he would prefer an “intelligent solution” to plant closures and confirmed that the company is in advanced discussions with the defense industry about a small German plant.

Volkswagen is facing challenges on multiple fronts. Chinese electric vehicles have eroded its business in China, which for years subsidized operations back home. Chinese brands are now making inroads into Volkswagen’s European heartlands, and President Trump’s tariffs have added billions of dollars in costs to its import-reliant U.S. business.