Volkswagen is reportedly considering cutting tens of thousands of additional jobs and potentially closing factories as part of a plan by CEO Oliver Blume to make Europe’s largest carmaker more competitive, according to a report by Manager Magazin.

The plans, presented by Blume at a board meeting earlier this week, include doubling workforce reductions to as many as 100,000 jobs, according to the report, which cites sources familiar with the discussions. Volkswagen, the owner of Porsche and Audi, currently employs around 657,000 people.

Blume is seeking to streamline the Volkswagen Group, which is under pressure from US tariffs, ongoing weakness in the Chinese market, and increasing competition in Europe from companies such as BYD and Stellantis. The new strategy is expected to be presented to the supervisory board next month and is seen as the starting point for difficult negotiations that could last for months.

At Volkswagen, restructuring efforts are often watered down due to the strong presence of trade union representatives and regional state officials, who together hold a majority on the supervisory board.

The company’s drive to reduce costs reflects broader challenges facing the German automotive industry. Mercedes-Benz is also planning deeper cost-cutting measures, while BMW recently issued a sharp profit warning that sent its shares lower.

Blume’s plan reportedly includes reducing general expenditure by €11 billion by the end of the decade, as well as closing four factories in Germany in the medium term. These are said to include an Audi plant in Neckarsulm and Volkswagen plants in Hanover, Zwickau and Emden.

At the same time, the spin-off of parts production divisions is being considered, along with the potential separation of the Volkswagen brand from the wider group in order to increase flexibility, as the brand is currently seen as having relatively low profitability.

A company spokesperson said Volkswagen “must undergo a profound transformation”, declining to comment on the specific details of the report and stressing that the management board is working intensively on a restructuring plan with a long-term focus.

Volkswagen shares rose by as much as 1.2% in Frankfurt, although they remain around 25% lower than at the beginning of the year.

Some steps have already been taken, including the sale of a 51% stake in the Everllence unit, while around 28,000 employees have agreed to leave under a plan to cut 50,000 jobs by 2030. At the same time, production capacity has been reduced from 12 million vehicles per year to approximately 9 million.

Trade unions reacted strongly, describing the proposals as “disruptive to the workforce and the regions in which we operate”, and warning that they would strongly oppose them.

Implementing redundancies at Volkswagen is difficult, as employee representatives hold 50% of seats on the supervisory board, while the state of Lower Saxony holds a further two seats.

Analysts note that VW has been slow for years to adjust its workforce, while rising competition from Chinese carmakers is now placing significant pressure on the German automotive giant.