Volkswagen's restructuring will cost approximately €16 billion — the company will cut up to 60,000 jobs

The total cost of Volkswagen's plan to cut jobs and potentially close plants could amount to roughly €16 billion ($18.6 billion). This was reported to Reuters by a person familiar with the matter. The costs are part of the sweeping restructuring agreement reached last week.

Europe's largest automaker is carrying out the most extensive restructuring in its history. The company attributes the need for change to growing competition from Chinese automakers, high tariffs, and excess production capacity.

The plan calls for finding future uses for four plants in Germany — Emden, Zwickau, Osnabrück, and Hanover. Production of current models at these facilities will be gradually phased out over the next decade.

In addition, Volkswagen has expanded the scale of job cuts by another 50,000 positions compared to what was previously planned. Overall, the company's global restructuring could involve the elimination of up to 60,000 jobs.

A Volkswagen representative declined to comment on the estimated costs of the restructuring. This information was first reported by the German publication Der Spiegel.

According to Reuters' source, phasing out production at the Emden and Zwickau plants will cost approximately €1 billion for each facility. For the Osnabrück and Hanover plants, the corresponding costs are around €2 billion each.

Another roughly €10 billion will be allocated to cover costs associated with cutting up to 60,000 jobs worldwide.

Volkswagen's new "Future Plan 2030" aims to restore the company's competitiveness. The plan also envisions roughly halving the number of car models and raising the operating margin to 9% by 2030.

The restructuring agreement is considered the most extensive change in Volkswagen's history. The company is simultaneously under pressure from declining sales in China, US tariffs, and the rapid expansion of Chinese automakers in the European market.