Volkswagen’s India business is speeding up a three-year restructuring plan that could lead to around 12% of its workforce being cut, Bloomberg reported, citing people familiar with the matter. The move is aimed at reducing costs ahead of the company’s next investment cycle in India.
Skoda Auto Volkswagen India Pvt. started the restructuring programme in 2025 but has now brought forward the timeline, the report mentioned. Job reductions are expected to take place in quicker stages through 2027.
A few hundred office and factory jobs are expected to be affected during the programme, the people said. They asked not to be named as they were discussing internal matters.
The restructuring is expected to help Volkswagen save tens of millions of dollars at its India operations by the time it begins launching its next generation of vehicles, including a new electric model.
The company is looking to enter this next investment phase with a lower cost base after finding it difficult to build scale in India.
Piyush Arora, managing director and chief executive officer of Skoda Auto Volkswagen India, said the company was not commenting on “speculative figures” regarding its workforce. He said the company’s efforts to optimise operations across its Indian business units were continuing to gain momentum.
He added that the company expects to expand its local engineering team and increase investment in India, which it sees as an important manufacturing, engineering and export hub for the group.
The job cuts in India are separate from Volkswagen CEO Oliver Blume’s wider global restructuring programme, according to the people, the report mentioned.
Blume has received backing from the supervisory board for a global overhaul that includes cutting another 50,000 jobs, reducing the company’s vehicle model range by 2035 and cutting capital spending planned for 2027-2031 by 16%.
The India restructuring is focused on the needs of the local business and is expected to continue through 2027. It is also aimed at helping the India unit manage funding from its headquarters.
Volkswagen is also considering a major change to its ownership structure in India.
The German automaker is close to a deal that could give billionaire Sajjan Jindal’s JSW Group a controlling stake in the business and bring in fresh capital, people familiar with the matter said earlier.
The cost-cutting plans come as Volkswagen faces challenges in India, where it has a relatively small presence after more than two decades.