Volkswagen Is Planning To Shed Tens Of Thousands Of Jobs. Its CEO Says Cost Cutting ‘Is Not Over’

Volkswagen CEO Oliver Blume told workers to increase saving efforts as the company gears up to implement a plan that will shed tens of thousands of jobs over the years amid a grave crisis.

"This journey is ​not over. Because we not only measure ourselves ​against our own past performance. We measure ourselves ⁠against the best locations in Europe," Blume told workers, according to excerpts from a speech shared by the company and detailed by Reuters.

"Labor costs today are more than double those of comparable European locations. And when it comes to ​factory costs, other plants are still significantly cheaper. ​This is not a criticism, it is the reality against ‌which ⁠we must measure ourselves," he added.

Earlier this month, the company's controlling family shareholders delivered their strongest public endorsement yet of a sweeping restructuring plan, urging management to move faster as Europe's largest automaker battles rising competition from Chinese manufacturers, higher tariff costs and weakening profitability.

The comments came from Porsche SE, Volkswagen's largest shareholder through the Porsche and Piëch families. Volkswagen has already confirmed it is evaluating plans to eliminate up to 100,000 jobs, double the number that had been previously discussed, as part of an effort to restore competitiveness after a sharp earnings decline.

"The Volkswagen Group is at a historic crossroads," Hans Dieter Pötsch, chairman of Porsche SE's management board, said in a statement. "The decisions that Volkswagen makes now will determine its future. For the sake of the company and its sustainable competitiveness, everyone must now step up and take responsibility," he added.

Volkswagen responded by emphasizing that Porsche SE's comments align with management's strategy. A company spokesperson told CNBC that the shareholder statements confirm Volkswagen's position on its proposed plan and reinforce the urgency of implementing those measures.

Chief Executive Officer Oliver Blume has previously acknowledged the company faces an increasingly narrow window to complete its transformation. Speaking after Volkswagen released its half-year earnings on July 24, Blume said the automaker already has a defined strategy and implementation plan.

"What we do not have is time," Blume said. "That is why we have already started work in many areas and are implementing measures from our future plan." He added that Volkswagen's primary objective is to secure the group's long-term competitiveness despite the mounting pressures facing the global automotive industry.