Struggling German carmaker Volkswagen is preparing to slash up to 100,000 jobs from its 630,000-strong workforce, as the company faces mounting pressure from agile Chinese electric vehicle (EV) competitors. VW employs about 60% more workers than Toyota, 140% more than Stellantis, and nearly 240% more than Ford.

The bloated workforce, once a symbol of German industrial might, has become a massive burden. Analysts attribute the problem to long-standing strategic decisions, including in-house production of many components and software, which drives up labor costs. Factory expenses in Germany can be up to twice those of competitors.

Although Volkswagen survived the 2015 Dieselgate scandal without lasting financial damage, the company was slow to transition to EVs. This delay contributed to slower sales in China, which accounted for a third of total VW sales, as well as softening demand in Europe.

VW's decision-making is heavily influenced by powerful unions and a key shareholder—the state of Lower Saxony, which holds 20% of voting rights. This has led to years of neglect in adjusting workforce numbers, according to analysts.

Experts warn that the proposed cuts may not be enough. Volkswagen needs to invest more heavily in automation and undertake deeper reforms to compete with leaner rivals like China's BYD. The EU has imposed tariffs of up to 45% on Chinese EVs, but some economists predict that VW could eventually be bought by a Chinese carmaker.

Source: www.dw.com