The story so far: The German carmaker Volkswagen and the British marquee brand Jaguar Land Rover (JLR) are shedding jobs — the former deciding to axe 50,000 positions and the Tata-owned brand 4,000. The latest cut will reduce Volkswagen’s employee count by a lakh by the end of the decade, as the company had already reached agreements with employees since the end of 2024 to cut 50,000 jobs.
European carmakers have fallen behind Chinese manufacturers in the race to transition to electric vehicles and want to be shipshape in navigating the challenging terrain. In July, BMW revealed its decision to cut its workforce by 8,000. Nifty homegrown brands are blocking Volkswagen’s traffic in the lucrative Chinese market, and the company, under its chief executive, Oliver Blume, is taking a hard look at its worldwide operations, especially in the German market.
How have the two carmakers reached a settlement to cut jobs?
By no means has it been a smooth drive for the two giants who thrived in the heyday of internal combustion engines. Volkswagen had to contend with its powerful union to get approval for what many say is the most eventful restructuring in its 89-year history.
Workers hold 10 seats in the decision-making supervisory Board of the company and shareholders, including the State of Lower Saxany, another 10. The job cuts were announced after a tense meeting of the Board.
“Volkswagen is simply not a corporation that operates solely according to capitalist rules. Because of its history, Volkswagen also belongs to us, the employees,” Daniela Cavalo, top union representative, said, as quoted by the Wall Street Journal.
Much of the money spent on building a plant at its Wolfsburg headquarters in the 1930s came from the earnings of the company’s workers seized during Adolf Hitler’s reign, and that gives a sense of ownership even to the present-day workforce.
The agreement stopped short of an announcement on closing down four factories at Emden, Hanover, Zwickau and Neckarsulm in Germany, deemed to have no future after 2030, when electrification is expected to stub out production of cars powered by internal combustion engines in Europe. The company has reset its targeted production to nine million vehicles a year, from 12 million before the COVID-19 pandemic and 10 million recently.
On the other hand, JLR, the cash cow of Tata Motors, is targeting £1.7 billion (around ₹28,000 crore) in savings through the job cuts, reports said. The cuts will largely target the white-collar workforce, while direct manufacturing jobs will be protected.
The company will scale down its breakeven point to 3 lakh vehicles from 3.5 lakh, reducing annual sales by 14% to cover its cost base. This will make it fitter in a rapidly evolving global market due to rapid technological change, intense competition, and geopolitical uncertainty, JLR chief executive P.B. Balaji said.
Why are the two carmakers on the skids?
Volkswagen ruled Chinese roads for four decades till its growth engines started sputtering. The world’s largest carmaker after Toyota was late to the EV race with fleet-footed Chinese carmakers, after dominating the market through a string of joint ventures. Even in Latin America and Africa, dominant markets of the German giant, Chinese carmakers are giving Volkswagen nightmares. In China, its sales skid by one-third of the 2019 figures, reports said.
There is no model blitz in taking on Chinese rivals pumped up by cheaper state-backed loans. The company lost out to manufacturers such as BYD and Geely owing to a perceived reluctance to take the wheel at the EV race.
For JLR, with the U.S. as its largest market but with no American production base, Donald Trump’s tariffs have created potholes on the road to profits. The tariffs on exports to the U.S. from the U.K. range from 10% to 15% for its models. It was China where its sales plummeted the most despite its electric-only reinvention.
How are the companies changing gears in India?
Volkswagen, which underwent a renaissance in India in recent years as Skoda Auto Volkswagen India Private Ltd., with models made for India, is looking for an active partner for its business. Volkswagen expects to sign a deal with a local partner in India this year, the chief executive officer of its Skoda brand, Klaus Zellmer, said in India, as the German group struggles to build scale in the world’s third-largest car market, Reuters reported in August.
Skoda is in charge of the group’s strategy in India, where Volkswagen is in talks on a joint venture with the JSW group, which has indicated it wants a majority stake. Mr. Zellmer said VW was in discussions with an unnamed partner and was confident of completing a deal this year.
JLR is a wholly owned subsidiary of Tata Motors, which acquired the iconic British luxury automaker in 2008. It clocked its best first-quarter retail sales for 2026-27 at 1,665 vehicles, an 11% year-on-year increase, in India. The India-U.K. free trade agreement is benefiting the company. JLR and Tata Motors opened a plant in Ranipet in Tamil Nadu in February 2026.
Published – September 09, 2026 12:19 pm IST
