Volkswagen Shares Climb After Restructuring Plan Receives Approval

By Dominic Chopping

Volkswagen shares jumped Friday after a wide-ranging restructuring plan that will see another 50,000 job cuts was approved by the company's supervisory board.

Shares rose as much as 8.7% in early European trade.

The German automaker had warned that it must do more in its fight against mounting industry headwinds to remain competitive, after conceding that a previously agreed plan wouldn't be enough.

New U.S. tariffs, an end to U.S. electric vehicle subsidies, rising manufacturing costs and mounting competition from Chinese rivals both in China and increasingly in Europe, are all taking a toll.

The group, which houses a vast stable of brands that includes VW, Audi and Porsche, has been working on a broad cost-cutting plan throughout 2025 and 2026 following an agreement with its powerful unions that included 50,000 job cuts across the group in Germany by 2030 and billions of euros a year in cost savings, while avoiding factory closures.

However, executives had outlined further steps to slim down the sprawling group, including cutting its model lineup by as much as half and continuing to reduce manufacturing capacity, with Chief Executive Oliver Blume recently saying that further staffing cuts could also be required while warning that he couldn't guarantee the future of four German factories.

The deal with the company's supervisory board late Thursday will see an additional 50,000 jobs cut, but it stopped short of committing any factories to closure, with Volkswagen saying it would seek alternative uses for four plants in the years ahead.

A revised focus in the U.S. and China, simplified group structure and increased efficiencies, as well as a sharp drop in capital expenditure and research and development spending was also agreed.

The supervisory board--which is responsible for monitoring the management and approving important corporate decisions--is made up of 20 members, 10 of which are linked to Volkswagen's unions and two represent the company's home state of Lower Saxony.

"This is a brave plan and a realistic decision for all concerned," Citi analysts said in a note to clients.

The bank added that given Volkswagen's German plant competitiveness and lack of global revenue opportunities, it simply had no other choice than to launch a new plan that will allow it to cut costs, reduce the number of models and slash investment spend.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

September 04, 2026 04:05 ET (08:05 GMT)