Volkswagen is considering cutting another 50,000 jobs, according to an internal memo seen by AFP, as Europe's largest carmaker seeks ways to address mounting challenges.

This comes on top of the 50,000 jobs Volkswagen is already cutting in Germany, including 35,000 at its core Volkswagen brand under a 2024 deal with unions. If total job cuts reach 100,000, it would mark the biggest restructuring in the global auto industry's history—surpassing the 50,000 jobs General Motors cut when the company declared bankruptcy in 2009.

The move comes just days after chief executive Oliver Blume appeared to rule out factory closures, telling Germany's Bild am Sonntag that "there are smarter solutions" than shutting plants.

The German car titan has come under intense pressure from US tariffs, slimmer profit margins on electric cars, and, above all, fierce competition in China, where carmakers are now increasingly exporting to Europe.

‘Group must act now,’ Blume on job cut, internal memo shows

In a memo outlining its cost-saving plans, Blume told workers that the group must "act now" to safeguard its future.

"We need to become more efficient, more robust and simpler. We must reduce our costs," he said, adding that VW's costs are about 20% higher than those of competitors and hence, overheads need to be cut to a "competitive level".

"As half of our overheads stem from staff costs, a theoretical calculation — assuming no change in labour costs — would result in the loss of around 50,000 jobs," he said.

VW is also the parent company of car brands ranging from SEAT to Audi and Porsche and Blume also confirmed the future of four German factories was uncertain.

"The truth is also that, as things stand today, we cannot confirm that the Emden, Hanover, Zwickau and Neckarsulm plants will be able to operate competitively into the 2030s," he said.

Unsettling…: Blume on media leaks about job cuts

Meanwhile, unions have strongly criticised VW and Blume for unsettling employees by allowing media reports of mass job cuts to circulate without comment, and are demanding that the CEO take a public stand.

In the memo, Blume insisted leaks to the media had been unplanned and said that reports of looming cuts had "annoyed" him.

"The disclosure of such confidential, sensitive information not only unsettles our workforce; it is also damaging to the business," he said.

Some industry analysts have suggested that Volkswagen had deliberately publicised the number of 100,000 as a negotiating tactic, and that the final figure of cuts is likely to be lower.

Volkswagen is not alone among German carmakers in seeing its business suffer in recent times. BMW and Mercedes-Benz have also suffered falling profits, in particular due to increased competition from local rivals in China, the world's biggest auto market.