Volkswagen's Crisis Deepens: 100,000 Job Cuts, Factory Closures, and the Possible Sale of Ducati and Lamborghini

As of late June and early July 2026, Volkswagen is navigating the most severe financial restructuring in its history. The automaker is contending with weak electric-vehicle demand, high German production costs, intensifying competition from Chinese brands, and new U.S. tariffs. In rapid succession, major—but largely unconfirmed—actions have been reported across authoritative sources, placing the company at a critical inflection point.

The Everllence Divestiture: The Largest Piece of the Puzzle

On June 24–25, 2026, Volkswagen agreed to sell a 51% controlling stake in its heavy diesel-engine unit Everllence (formerly MAN Energy Solutions) to Bain Capital for approximately €7.4 billion ($8.4 billion) . The deal, one of Europe's largest private-equity carve-outs of the year, came after a competitive auction. Volkswagen plans to retain a 49% minority stake in the medium term . The proceeds are intended to help fund the broader restructuring, though analysts warn they may be quickly consumed by the scale of the overhaul.

Adviser Pressure to Sell Ducati and Lamborghini

According to a Financial Times report cited by multiple outlets, investment bankers and advisers are actively pushing Volkswagen to sell or float two of its most prized Italian assets: Ducati and Lamborghini . Italian newspaper Corriere della Sera reports that Ducati may face a direct sale, while Lamborghini could be headed toward a stock-market listing . Analysts say both brands would attract strong investor interest .

Volkswagen has not officially confirmed these discussions, and the company has formally denied such plans in the past—most notably in 2019 regarding Lamborghini . As of July 1, 2026, no decision has been announced .

Up to 100,000 Job Cuts and Four German Plant Closures

On June 26, 2026, Reuters and Manager Magazin reported that CEO Oliver Blume is weighing up to 100,000 job cuts globally—roughly 15% of VW's 657,000-strong workforce—and the closure of four German plants: Hanover, Zwickau, Emden, and Audi's Neckarsulm . Closing these four sites alone could eliminate more than 45,000 jobs . This figure would double an earlier target of ~50,000 cuts announced just months prior .

The supervisory board is scheduled to discuss the plan on July 9, 2026 . A key internal document reportedly avoids specifying a precise headcount figure to maintain flexibility during negotiations with labor unions .

Unwinding the €1.5 Billion Bosch Autonomous Driving Partnership

On June 28, 2026, Germany's Bild newspaper reported that Volkswagen plans to end its Automated Driving Alliance (ADA) with Robert Bosch after sinking approximately €1.5 billion ($1.71 billion) into the joint development effort . The partnership, launched in 2022, aimed to develop software for driver assistance and autonomous driving across Volkswagen's brands. Internal assessments reportedly found the technology to be not competitive, particularly for Level 2++ highway and city driving .

Neither Volkswagen nor Bosch has officially confirmed the termination, but multiple sources treat it as imminent . The partnership employed more than 1,000 specialists .

Cariad Software Unit: A Persistent Weakness

Cariad, Volkswagen's in-house software subsidiary, has been a persistent source of delays and cost overruns. The termination of the Bosch partnership is partly tied to Cariad's inability to deliver on autonomous-driving milestones . Cariad's struggles are a key driver of Volkswagen's broader cost-cutting and strategy re-evaluation, highlighting the challenge traditional automakers face in building competitive software capabilities.

The Broader Restructuring Landscape

Volkswagen's restructuring extends well beyond the headlines. The company previously announced a target to cut costs by 20% by 2028 . Reports indicate an $11 billion free-cash-flow shortfall beyond 2026, which has pushed CFO Arno Antlitz to ask finance teams across the group to identify ways to bridge the gap . The combined costs of the Everllence divestiture, potential sale of premium brands, plant closures, and severance for up to 100,000 workers are expected to run into the billions of euros, though a precise total has not been publicly stated .

Key uncertainty: Volkswagen has not formally confirmed the Ducati/Lamborghini sale discussions, the 100,000 job-cut figure, the four-plant closures, or the Bosch partnership termination. All of these reports are based on insider accounts to Manager Magazin, the Financial Times, and Bild. Every major decision is subject to change pending the July 9, 2026 supervisory board meeting and negotiations with powerful labor unions, which have historically opposed large-scale divestitures and job cuts .