One of the world's biggest automakers is preparing for a brutal overhaul that could wipe out as many as 100,000 jobs and shutter several factories in what would rank among the largest corporate layoffs in modern history.

Volkswagen is reportedly considering cutting nearly one in every six positions across its global workforce as it battles mounting pressure from Chinese rivals, shrinking profits, expensive electric vehicle investments and the threat of US tariffs.

According to German business newspaper Manager Magazin, the sweeping plan would dramatically deepen an existing restructuring program and could ultimately eliminate around 100,000 jobs worldwide.

The company currently employs roughly 625,000 people globally.

If approved, production would reportedly cease at four German manufacturing sites, including facilities in Emden, Zwickau and Hanover, along with an Audi plant in Neckarsulm.

The proposals are expected to be presented to the company's supervisory board on July 9, setting the stage for what could become a fierce showdown between executives and labor unions.

The alarming reports come just days after CEO Oliver Blume issued one of his starkest warnings yet about the company's future.

'Never has the risk situation been so high,' he told shareholders.

While the automaker has declined to comment directly on the reported plans, it acknowledged that its long-standing business model is under severe strain.

'The Executive Board has repeatedly stated that our current business model no longer works across all brands: developing cars in Germany, producing them in Europe and exporting them to the world,' a company spokesperson said.

The manufacturer has already been trying to slim down its operations.

Last year it announced plans to cut around 50,000 jobs in Germany by the end of the decade while reducing production capacity by roughly half a million vehicles.

The latest proposal would reportedly double those cuts.

The financial pressures have been mounting rapidly.

Although revenue remained relatively steady in 2025, operating profit plunged by more than 50 percent compared with the previous year.

Operating earnings tumbled from $21.8 billion to just $10.2 billion, while net income fell from $14.2 billion to $7.9 billion.

One of Volkswagen's biggest headaches continues to be China - once its most important growth market.

Vehicle deliveries there slipped 8 percent last year, while battery-electric vehicle sales plunged by more than 44 percent as domestic Chinese manufacturers intensified a brutal price war.

At the same time, the company has struggled to generate strong profits from electric vehicles, while rising manufacturing costs and new US tariffs have further squeezed margins.

The restructuring effort is already well underway.

Earlier this year, the automaker closed a small production site in Dresden and has been searching for a buyer for its Osnabrück factory, where production is expected to end next year.

Blume has previously insisted that permanently shutting factories is not his preferred option, suggesting some facilities could instead build vehicles for Chinese brands or even be repurposed by defense companies.

But labor leaders have reacted furiously to the latest reports.

Union officials warned they would fight any attempt to push through such deep job losses.

'Should such plans be pursued, we would oppose them with all our might,' workers' representatives said in a joint statement.

They accused management of reacting blindly to mounting challenges instead of delivering a coherent long-term strategy for one of Germany's most important industrial employers.

The company has been aggressively searching for savings elsewhere.

It recently agreed to sell its marine engines business in an $8.5 billion deal and has targeted nearly $7 billion in annual cost reductions by 2030.

Executives have repeatedly described cutting costs as their biggest priority as competition intensifies across the global automotive industry.

For decades, the manufacturer symbolized Germany's industrial strength and engineering excellence.

Now, as Chinese competitors race ahead in electric vehicles and global demand shifts, the company finds itself confronting one of the biggest crises in its history - with tens of thousands of jobs potentially hanging in the balance.