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Volkswagen’s Unique Ownership Structure Faces Fresh Scrutiny Amid Restructuring Plans

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Volkswagen’s complex ownership and governance structure has come under renewed scrutiny as the German automaker prepares a major restructuring that could include plant closures and nearly 100,000 job cuts. Labour unions have vowed strong resistance, while the company’s unique legal framework gives workers and the German state of Lower Saxony significant influence over key decisions.

The influence stems from the Volkswagen Law, introduced in 1960, which was designed to protect the company from outside control. The law grants Lower Saxony, which holds a 20% voting stake, the power to block major shareholder decisions, while worker representatives on Volkswagen’s 20-member supervisory board can effectively veto significant factory-related changes, making large-scale restructuring more difficult.

Volkswagen’s ownership structure further complicates governance. Porsche SE, the investment vehicle of the Porsche and Piech families, controls a majority of voting rights despite owning less than a third of the company’s total equity. Investors have long criticised this arrangement, arguing it limits corporate governance reforms and contributes to uncertainty as Volkswagen faces falling share prices, leadership challenges and growing pressure to adapt to a changing automotive market.

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STMicro Sees Clearer 2026 Outlook as Restructuring Costs Persist

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STMicroelectronics forecast first-quarter revenue slightly above market expectations, citing improving visibility and signs of recovery in its key end markets, but warned that restructuring costs will continue to weigh on results through 2026. The Franco-Italian chipmaker said it expects revenue of about $3.04 billion in the first quarter, ahead of analysts’ average estimate of $2.99 billion, lifting its shares in early trade.

The company reported fourth-quarter net income of $125 million, well below both analysts’ expectations and last year’s result, after booking a $141 million impairment linked to restructuring. Excluding the charge, profit would have been $266 million. STMicro said demand in its core automotive, industrial and consumer electronics markets has begun to stabilise as inventory corrections ease after a prolonged post-pandemic slowdown.

However, the group cautioned that the impact of its European manufacturing overhaul will be felt across every quarter of 2026. The restructuring involves shifting production away from older facilities in France and Italy toward newer sites, with finance chief Lorenzo Grandi saying costs will remain elevated even as operational charges gradually decline, supporting margin improvement over time.

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Citigroup plans 20,000 job cuts over two years

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Citigroup plans to cut approximately 20,000 jobs, equivalent to about 10% of its global workforce, within the next two years as part of a broader restructuring initiative led by CEO Jane Fraser. This move is aimed at streamlining operations and reducing layers of bureaucracy within the bank. Fraser, who assumed leadership in 2021, envisions 2024 as a pivotal year for the company.

Citi has already divested some of its overseas operations and initiated the listing of its Mexican unit as a standalone entity. Despite reporting a $1.8 billion loss in the last quarter of 2023, attributed to specific factors such as the devaluation of the Argentine peso and a government fee imposed on US banks, Fraser emphasized the progress made in implementing the bank’s strategic plan.

The restructuring is expected to cost around $1 billion in the current year, in addition to the $800 million incurred in the recent quarter. However, the bank anticipates saving $2.5 billion over the medium term. While specific details about job cuts in the UK and affected units were not disclosed, Citi’s workforce is projected to decrease from about 240,000 at the beginning of 2023 to approximately 180,000 by 2025 or 2026.

Citi, one of the largest banks in the US, has faced investor pressure to improve its performance, with profits trailing behind its peers. The recent quarterly loss was influenced by unique circumstances, and for the full year, revenue increased by 4% to $78.5 billion, while profits declined by 38% to $9.2 billion. In comparison, competitors like Wells Fargo and JP Morgan reported revenue growth of 11% and 23%, respectively, with corresponding profit increases. Following the announcement, Citi’s shares experienced a 1.4% decline.

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