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Volkswagen Shares Gain as Supervisory Board Approves Transformation Plan; 50,000 Jobs at Risk

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Volkswagen Shares Gain as Supervisory Board Approves Transformation Plan; 50,000 Jobs at Risk

Volkswagen (VOW.F) shares rose on Friday morning after the company's supervisory board approved a transformation plan that includes cutting 50,000 jobs across the group.

Future Plan 2030, dubbed as "the most extensive transformation program" in the German carmaker's history, focuses on strengthening its financial base by simplifying the group structure, establishing a competitive production footprint and adjusting its workforce structure, according to a Thursday release.

The company's shares were up 5% in early trading in Frankfurt.

Acknowledging that its European plants have excess capacity of more than 500,000 units, the company plans to establish a "sustainable and competitive production structure" by the end of June 2027. It will also review options for its German plants in Emden, Zwickau, Hanover and Neckarsulm.

Volkswagen also plans to streamline its model portfolio by 50% and cut product complexity by 75% by 2035, allowing it to focus on its most compelling vehicles.

On the planned job cuts, the company said a "fundamental adjustment of the global workforce capacity is necessary to achieve the objectives of the transformation program and safeguard the competitiveness of the Volkswagen Group." Discussions with employee representatives regarding the proposed workforce adjustment, which includes management roles, are expected to start promptly.

"The Supervisory Board has unanimously approved the Executive Board's Future Plan presented today. This is a strong signal for the future of the Volkswagen Group," Volkswagen Chief Executive Oliver Blume said. "We are taking responsibility for our entire workforce, for our partners and for industrial jobs worldwide. Over the coming years, we will invest a three-figure billion sum to make our iconic brands even more attractive, stronger and more competitive."

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