Volkswagen's Frankfurt-listed shares jumped more than 8% after the automaker's supervisory board approved a plan to cut 50,000 more jobs, doubling its total workforce reduction target to about 100,000 positions by 2030. The move is part of a wider "Future Plan 2030" overhaul aimed at lifting operating margin to 9% from 3.8%, but Citi analysts say the deal doesn't automatically change the competitive pressure in Europe, continued China losses, or raw material costs.
Volkswagen told investors it will cut 50,000 more jobs, and the market cheered. Shares of Europe's largest automaker rose more than 8% on Thursday, September 3, after its supervisory board approved the plan.
Why the market cheered the job cuts
When a company cuts tens of thousands of jobs, its fixed costs fall fast, and investors read lower costs as higher future profit. The move doubles Volkswagen's total workforce reduction target to about 100,000 positions by 2030, roughly 15% of its global staff.
A second reason for the relief was union support. Volkswagen's unions, which represent more than 650,000 workers, backed the framework. That deal helped avoid a strike and eased a standoff with Lower Saxony, its second-largest shareholder.
Inside the Future Plan 2030 overhaul
The job cuts are one piece of a 12-part overhaul the company calls the most extensive transformation in its 89-year history. Volkswagen plans to cut its model lineup in half and reduce vehicle complexity by about 75% so it can focus on cars with a higher profit margin. It also admitted to major factory overcapacity in Europe and is reviewing the future of four German plants at Emden, Hanover, Zwickau, and Neckarsulm.
Management wants the plan to deliver a 9% operating margin by 2030, up sharply from the 3.8% margin Volkswagen posted in the first half of this year. It also targets annual sales of about 9 million vehicles. CEO Oliver Blume is betting that fewer models and lower costs can rebuild profitability that has dropped over the past year.
Risks still facing the turnaround
Volkswagen's profit from its China joint ventures is projected to fall to between 200 million and 600 million euros this year, down from 958 million euros in 2025. Cheaper, high-tech Chinese electric vehicles from rivals like BYD keep taking market share, and the company also faces Western import tariffs and high German energy and labor costs.
How Volkswagen compares to U.S. rivals this year
Volkswagen's struggles echo across the industry, though performance varies widely. Ford stock is up about 13% year to date, and General Motors has gained roughly 3%, while Tesla and Rivian have each fallen about 25% during the same stretch. That gap shows investors currently favor automakers with lower costs and steadier cash flow.
Management has until June 2027 to finalize what happens to the four underused German factories, and any union friction could pressure the stock again.
Source: TheStreet
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