Volkswagen Announces Restructuring, Jefferies Issues 'Buy' Rating

Volkswagen AG is undertaking a substantial restructuring effort in Germany, potentially involving the closure of factories and the elimination of tens of thousands of jobs, according to documents released September 10, 2026.

The company calculates potential costs of up to €16 billion related to the restructuring. Approximately €10 billion is allocated for planned job reductions through 2030, covering costs such as early retirement packages, severance payments, and social plans. An additional €2 billion is earmarked for the potential cessation of automobile production in Emden and Zwickau by 2031, with another €2 billion each projected for the Volkswagen plant in Hannover and the Audi location in Neckarsulm, potentially ceasing operations by 2032 and 2034 respectively. Volkswagen anticipates these costs will be offset by savings in salaries by 2037.

Simultaneously, Jefferies has maintained a 'Buy' rating for Volkswagen, assigning a price target of €120 per share. The firm reports that investor and Volkswagen sentiment at a recent industry conference was the most positive it has been in years, despite the company acknowledging ‘immense upcoming challenges and uncertainties.’ The restructuring plan aims for a significant increase in profitability, targeting an operating profit of €9 for every €100 of revenue by 2030, a substantial increase from the €3.80 reported for the first half of the current year. This requires significantly greater efficiency and cost reduction, potentially including the elimination of 50,000 positions, half of which may be in Germany.

The future of four sites – Emden, Zwickau, Hannover, and Neckarsulm – is currently uncertain, with management not identifying viable future uses for these locations. A concept for a competitive European production structure is expected by mid-2027, alongside examination of alternative uses for the threatened sites. These announcements follow the supervisory board’s unanimous approval of a ‘Future Plan’ designed to make the corporation more robust and competitive.

Volkswagen’s reported operating profit of €3.80 per €100 of revenue at the half-year mark contrasts with the target of €9. The potential €16 billion in restructuring costs represent a significant financial undertaking, and the success of the plan hinges on realizing projected savings and achieving the targeted profitability increase.