Volkswagen plans to lay off 100,000 workers as German politicians rebel

Volkswagen is considering laying off up to 100,000 workers, sparking fierce political backlash in Germany. Chancellor Friedrich Merz's government, Lower Saxony state leaders, and unions are opposing the redundancy plans, while the AfD is using the crisis to attack the government. The supervisory board is set to discuss the plans in July.

Volkswagen is planning to lay off up to 100,000 workers in Germany, making this one of the country's most significant economic and political issues of the year. The carmaker's restructuring plan has sent shockwaves through both Berlin and Lower Saxony, where Volkswagen is headquartered.

Government pledges to protect jobs

Chancellor Friedrich Merz's government has pledged not to abandon the carmaker or its workers. Government spokesman Stefan Kornelius said that "the primary goal is to preserve production sites of German manufacturers and protect jobs". Nevertheless, the government's hands are largely tied-VW is a publicly listed company, and the state's direct intervention in its business decisions is limited.

According to Politico, VW management and the politicians and union representatives sitting on the supervisory board are now on a direct collision course. The carmaker's 19-member supervisory board allocates no fewer than 11 seats jointly to politicians and worker representatives, giving them significant blocking power.

Lower Saxony is the main obstacle

Lower Saxony plays a particularly crucial role, being the second-largest shareholder in Volkswagen. The state's Social Democrat Prime Minister Olaf Lies and Green Deputy Prime Minister Julia Willie Hamburg have both pledged to oppose the redundancy plans. In their view, mass job cuts will not solve the company's real problems-reclaiming lost market share requires a better business strategy, not just cost-cutting.

Media reports also suggest that VW management wants to fundamentally restructure the 89-year-old company: separating the VW core brand and parts manufacturing into independent units. According to experts, such a move would give management greater operating freedom, since currently, for instance, closing a factory in western Germany requires two-thirds approval from the supervisory board. Analysts nonetheless consider it unlikely that such a restructuring will actually be implemented, as it would also require the board's support.

AfD uses crisis to attack government

Volkswagen's troubles come at a particularly difficult time for Merz's CDU and SPD grand coalition, whose approval ratings have plummeted to record lows. Far-right Alternative for Germany (AfD) is using the industrial crisis to criticize the coalition. AfD leader Alice Weidel said sharply on Monday: "Germany's industrial base is collapsing at a dramatic pace right before our eyes. Even long-established companies are fleeing due to this federal government's poor economic management."

VW's supervisory board is set to discuss the redundancy plans in July 2026. Lengthy negotiations are likely ahead for all stakeholders, as they seek a balance between cost reduction and job preservation. The company's future remains uncertain for now.