Volkswagen to Implement Major Workforce Reductions Amid Cost-Saving Initiatives
20,000 employees agree to voluntary departures as part of a broader restructuring plan to cut 35,000 jobs by 2030.
Volkswagen AG, the German automotive giant headquartered in Wolfsburg, has enacted a cost-saving plan that will result in the reduction of approximately 35,000 jobs by the end of the decade.
The majority of these job cuts will occur within its German operations, according to recent reports.
In a significant development, around 20,000 employees have agreed to voluntarily leave the company as part of this restructuring effort.
The severance packages for affected workers are contingent on their length of service and can reach as high as €400,000 per individual.
This move follows an agreement reached between Volkswagen's management and labor unions at the end of 2024, which aimed at establishing cost-cutting measures for the company’s core brand, Volkswagen.
These measures are projected to reduce labor costs by €1.5 billion annually.
In addition to job cuts, the company announced further austerity measures, including a reduction in annual training positions from 1,400 to 600 starting in 2026. Furthermore, approximately 130,000 employees under the Volkswagen brand are expected to consent to a period without real wage increases.
As part of the restructuring, 5% of employees' salaries will be redirected into a fund to support flexible work models, while the annual bonus of €1,290 has been discontinued.
The IG Metall union has indicated that this negotiated strategy has so far prevented the closure of any Volkswagen factories.
However, uncertainties remain regarding the sustainability of this agreement amid the ongoing long-term crisis facing the German automotive industry.
The majority of these job cuts will occur within its German operations, according to recent reports.
In a significant development, around 20,000 employees have agreed to voluntarily leave the company as part of this restructuring effort.
The severance packages for affected workers are contingent on their length of service and can reach as high as €400,000 per individual.
This move follows an agreement reached between Volkswagen's management and labor unions at the end of 2024, which aimed at establishing cost-cutting measures for the company’s core brand, Volkswagen.
These measures are projected to reduce labor costs by €1.5 billion annually.
In addition to job cuts, the company announced further austerity measures, including a reduction in annual training positions from 1,400 to 600 starting in 2026. Furthermore, approximately 130,000 employees under the Volkswagen brand are expected to consent to a period without real wage increases.
As part of the restructuring, 5% of employees' salaries will be redirected into a fund to support flexible work models, while the annual bonus of €1,290 has been discontinued.
The IG Metall union has indicated that this negotiated strategy has so far prevented the closure of any Volkswagen factories.
However, uncertainties remain regarding the sustainability of this agreement amid the ongoing long-term crisis facing the German automotive industry.
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