Volkswagen India begins major restructuring, plans 12% workforce reduction in major 3-year cost overhaul: Report

Volkswagen Group’s India operations are accelerating a three-year restructuring programme that is expected to eliminate about 12% of its workforce by 2027, as the German automaker moves to reduce costs ahead of its next major investment cycle, Bloomberg News reported.

The job reductions are being implemented in faster tranches after the restructuring began in 2025, according to people familiar with the matter cited by Bloomberg News. The cuts are expected to affect a few hundred employees across white-collar and shop-floor roles.

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Cost-cutting drive

The restructuring is aimed at saving tens of millions of dollars at Volkswagen’s India operations by the time the company begins introducing its next generation of vehicles, including a new electric model.

Volkswagen is seeking to enter that investment phase with a leaner cost structure after struggling to achieve sufficient scale in India, one of the world’s fastest-growing automobile markets.

Piyush Arora, managing director and chief executive officer of Skoda Auto Volkswagen India, said: “While we do not comment on speculative figures regarding our workforce, our ongoing efforts to optimise operations across our Indian business units continue to gain momentum.”

He added: “Moving forward, the company expects to expand its local engineering team and deepen its investment in India as a key manufacturing, engineering and export hub for the group.”

India restructuring separate from global plan

The report stated that the India restructuring is separate from Volkswagen CEO Oliver Blume’s broader global overhaul. The global plan includes another 50,000 job cuts, a reduction in the company’s vehicle lineup and tighter capital spending.

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The India programme is expected to continue through 2027 and is linked to the domestic business’s need to operate more efficiently and secure funding amid pressure on Volkswagen’s global operations.

The cost-cutting exercise also comes as Volkswagen considers changes to its ownership structure in India. The company is reportedly nearing a deal that could give billionaire Sajjan Jindal’s JSW Group a controlling stake in its Indian operations and bring fresh capital into the business.

Its relatively small market presence compounds Volkswagen’s challenges in India after more than two decades in the country, where Maruti Suzuki, Hyundai, Tata Motors and Mahindra & Mahindra remain major competitors.