Volkswagen Shrinks Management Ranks and Overhauls Bonuses Ahead of Make-or-Break Board Vote
04.07.2026 - 01:03:20 | boerse-global.de
Volkswagen is slashing 5,500 management positions, paring its executive headcount from 21,500 to 16,000 as part of a sweeping restructuring that reaches deep into the company’s pay culture. The automaker is scrapping its complex network of leadership circles in favor of a streamlined four-level model designed to shorten decision-making and sharpen accountability. Alongside the structural shakeup, the bonus system is being rewritten: from 2027 onward, the individual performance component in managers’ variable pay will more than double, jumping from the current 13% to 17% range to 35%. A three-tier evaluation framework — target achievement, behavior, and impact — will be introduced, with top performers highlighted by a new “Impact Index” that makes underperformance harder to hide.
The management overhaul is just one front in a broader crisis gripping Wolfsburg. Chief executive Oliver Blume is pushing a radical cost-cutting plan that envisions cutting up to 100,000 positions worldwide and closing four German plants. That agenda faces fierce resistance from IG Metall, the works council, and even the federal government under Chancellor Friedrich Merz, which has demanded binding job guarantees. The conflict comes to a head on July 9, when Volkswagen’s supervisory board is scheduled to rule on the entire restructuring package. If the board blocks the measures, Blume is prepared to escalate: according to a CNBC report, management would call an extraordinary general meeting to let shareholders vote directly on the plan.
The stock market has taken notice of the tough management stance. On Friday, Volkswagen’s common shares climbed 2.00% to €74.64, shaking off some of the recent gloom. Meanwhile, the company’s preference shares — a separate class of stock — gained 1.28% to €74.12, recovering from a close of €73.18 the previous day. The preference stock’s relative strength index stands at 33.0, still pointing to an oversold market. That class had touched a 52-week low of €69.20 on July 1, before rallying roughly 7%.
Should investors sell immediately? Or is it worth buying Volkswagen?
Despite the short-term bounce, the longer-term picture remains bleak. The common shares have lost 29.65% since the start of the year, and trade far below their 200-day moving average of €94.22. For preference shares, the year-to-date decline is even steeper at 30.14%, leaving them about 32% below the 52-week high of €109.10 reached on December 15, 2025.
The management cuts and bonus revamp still require supervisory board approval, adding another layer of uncertainty to the July 9 meeting. Blume’s earlier pledge — made in late 2024 — to rule out compulsory layoffs until the end of 2030 now looks shaky. The board’s decision will set the course: either endorse the full restructuring and defuse the standoff, or reject it and trigger an extraordinary shareholder vote that could reshape Volkswagen’s future.
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