Volkswagen is facing the kind of restructuring moment that could reshape one of the world’s largest automakers for years to come. According to Reuters, CEO Oliver Blume told staff in an internal memo that the company may need to cut roughly 50,000 additional jobs as it works to close a major cost gap with rivals. That would come on top of about 50,000 job reductions already agreed across the Volkswagen Group, including Porsche and Audi, effectively putting the potential total near 100,000 positions worldwide.

The message is blunt: Volkswagen believes it is too expensive to compete as currently structured. Blume reportedly told employees that the company has calculated a 20 percent cost disadvantage compared with similar companies, a gap that is difficult to ignore as profits come under pressure. The automaker is dealing with weaker performance in China, rising tariff costs, softening demand in some key markets, and heavy investment demands tied to electrification and software.

The memo also comes after growing frustration from workers, who have been asking management to clarify its restructuring plans. Labor representatives on Volkswagen’s supervisory board reportedly rejected proposals that included job cuts and the possible closure of four factories. The plants said to be under review include Emden, Hanover, Zwickau, and Neckarsulm, with Blume reportedly noting that Volkswagen still cannot confirm competitive future use cases for those sites in the 2030s.

Plant closures are not the only option on the table. Blume has previously floated the idea of finding “intelligent solutions” for underused factories, including potential work tied to the defense industry or even building Chinese Volkswagen models in Europe. That kind of approach would allow VW to reduce excess capacity without immediately shutting facilities, though it remains unclear whether those alternatives can create enough work to satisfy labor leaders or solve the company’s cost problem.

Volkswagen has also said it plans to reduce production capacity and simplify its sprawling model lineup. That is no small task for a group that includes Volkswagen, Audi, Porsche, Škoda, Cupra, Seat, Bentley, Lamborghini, and other brands, many of which have overlapping products and costly regional variations. Analysts have argued that trimming models alone may not be enough, but it is one of the clearest ways VW can reduce complexity, development spending, tooling costs, and factory strain.

For Volkswagen, the challenge is balancing survival with identity. The company has spent decades building one of the broadest automotive portfolios in the world, but the industry around it has changed quickly. Chinese automakers are moving faster, EV margins remain difficult, tariffs are adding pressure, and traditional European manufacturing costs are hard to sustain. If the reported job cuts and plant decisions move forward, this could become one of the most consequential restructurings in modern auto industry history. For now, Volkswagen is still searching for a path that cuts deep enough to restore competitiveness without igniting a full-scale labor war at home.