Volkswagen CEO Oliver Blume said the carmaker could need to cut around 50,000 more jobs worldwide under a theoretical scenario in which labor costs remain unchanged, as the Europe's largest automaker seeks to narrow its cost gap with rivals, according to the carmaker's internal memo on Monday.
He stressed that the figure was based on cost comparisons rather than a final decision, adding that the company was assessing all brands, subsidiaries and regions to determine what adjustments were necessary and feasible.
Volkswagen has been under pressure from weak demand in Europe, rising tariff-related costs and the costly transition to electric vehicles, all of which have weighed on earnings.
Blume said the company's administrative and infrastructure costs remained about 20 percent higher than those of comparable rivals.
"Volkswagen is facing a very difficult situation, which is also a heavy blow to Germany, as the automotive industry remains an important pillar of the German economy," said Ewald Koenig, an Austrian journalist.
Sources familiar with the matter said labor representatives blocked Blume's plans, which reportedly included further job cuts and the possible closure of four German factories.
50,000 more job cuts could be needed to narrow cost gap: Volkswagen CEO
