Volkswagen India may cut 12% workforce as part of cost overhaul

Volkswagen's India business is accelerating a three-year restructuring programme that could result in a reduction of around 12% of its workforce as the German automaker prepares for its next phase of investment in the country.

The cost-cutting exercise at Skoda Auto Volkswagen India is expected to affect a few hundred office and factory employees and will be implemented in stages through 2027. The restructuring programme, which began in 2025, has reportedly been brought forward as the company looks to reduce operating costs and improve efficiency.

The planned workforce reduction is expected to help Volkswagen save tens of millions of dollars before it begins launching its next generation of vehicles in India, including a new electric vehicle. The company is seeking to enter its upcoming investment cycle with a leaner cost structure after struggling to achieve significant scale in the highly competitive Indian automobile market.

Skoda Auto Volkswagen India, however, has not confirmed reports about the exact number of jobs that could be affected. Managing Director and CEO Piyush Arora said the company was not commenting on speculative workforce figures but added that efforts to optimise operations across its Indian business units were continuing.

Volkswagen also maintained that its commitment to India remains strong. The company plans to expand its local engineering capabilities and increase investment in the country, which it considers an important manufacturing, engineering and export hub.

The restructuring programme in India is separate from Volkswagen's broader global cost-cutting strategy. The German automaker has been pursuing a major international overhaul that includes significant workforce reductions, a smaller vehicle portfolio and lower capital expenditure over the coming years.

In India, however, the focus remains on improving the financial efficiency of local operations and preparing the business for its next investment cycle. The restructuring is also expected to help the India unit better manage funding requirements from Volkswagen's global headquarters.

Meanwhile, Volkswagen is also reportedly exploring changes to its ownership structure in India. The automaker has been linked to discussions that could potentially give Sajjan Jindal-led JSW Group a controlling stake in the Indian business and bring additional capital into the operation.

The developments come as Volkswagen continues to face challenges in building a larger presence in India's fast-growing automobile market despite operating in the country for more than two decades. The proposed restructuring is expected to play a key role in strengthening the company's India operations ahead of future vehicle launches and investments.