Skoda Auto Volkswagen India is reportedly planning to reduce its workforce by around 12 per cent as the automaker restructures its India operations ahead of its next investment cycle.

The proposed reduction is expected to affect a few hundred employees across white-collar and shop-floor roles. The restructuring, which was initiated in 2025, is aimed at reducing costs and improving the company’s operational efficiency as it continues to face challenges in scaling its business in the Indian market.

The India restructuring is separate from Volkswagen Group’s broader global workforce overhaul. Under its Future Plan 2030, the group is planning to eliminate another 50,000 jobs globally by the end of the decade. This would come on top of around 50,000 positions already covered by restructuring programmes across the group, potentially taking the total number of planned job reductions to nearly one lakh.

The Volkswagen Group owns brands including Volkswagen, Audi, Porsche and Lamborghini. The scale of the restructuring reflects the pressure the automotive industry is facing as companies deal with changing demand patterns, the transition towards electric vehicles and increasing cost pressures.

Competition from Chinese electric-vehicle manufacturers has emerged as a major challenge for Volkswagen, particularly in China, where the group has faced weaker demand and increasing competition from local players. The company is also dealing with high production costs in Europe and the impact of US tariffs, adding to pressure on profitability.

For India, the workforce reduction comes as Volkswagen Group continues to evaluate how it can build a sustainable and more competitive business in a market where achieving sufficient scale has remained a challenge. The company’s India operations include Volkswagen, Skoda, Audi and Porsche, with Skoda Auto Volkswagen India managing the Group’s mass-market operations in the country.