German automobile company Volkswagen is set to embark on the biggest restructuring ever recorded in the car industry, after approving plans on Thursday to cut 100,000 jobs by 2030.

The company said that after the latest round of talks this week, management and trade unions had approved cutting 50,000 jobs, in addition to 50,000 redundancies already agreed, “to systematically align workforce levels with economic realities,” a statement by the Volkswagen group said.

The company, which currently has over 650,000 employees globally, said it reached the agreement on Thursday after a meeting of shareholders, unions, and state representatives on the supervisory board.

Following fierce competition from Chinese rivals, the company, as it battles for survival, also agreed to end production at four German plants: Emden, Zwickau, Hanover and the Audi site in Neckarsulm between 2031 and 2034.

Volkswagen chief executive Oliver Blume said, “The supervisory board has unanimously approved the executive board’s future plan presented today.”

Mr Blume, describing the move as the “most strategically profound transformation programme” in the history of the Volkswagen Group, said it is “a strong signal for the future.”

He also said the company would invest “a three-figure billion sum” in the next few years “to make our iconic brands even more attractive, stronger and more competitive”.

The company also said it will cut its car models, including Bentley and Audi, by half, “to systematically align workforce levels with economic realities.”

The 100,000 job cuts by the company, which also produces other vehicles such as Skoda, Seat, Audi, Porsche, Cupra and Lamborghini, represent about 15 per cent of the carmaker’s workforce globally.

Volkswagen faces serious competition from Chinese auto rivals in Europe, which is driving a decline in sales in China. The company is also battling U.S. tariffs and rising demand for electric vehicles, while still facing years of falling profits and overproduction in Europe.