- The sweeping job cuts are being made through early retirement and severance packages.
- VW wants to lower its German production capacity by 734,000 to better align with demand.
- Board members will also have their salaries and annual bonuses slashed in the coming years.
Six months ago, Volkswagen announced that it would cut more than 35,000 jobs across Germany by 2030. While that sounded like an audacious task when first announced, it’s been revealed that 20,000 employees have already agreed to leave the automaker voluntarily. It would seem as though many employees are eager to pack up their things, perhaps fearing they could be stuck on a sinking ship if they don’t leave.
Read: VW Confirms More Than 35,000 Job Cuts In Germany, Golf Production Moving To Mexico
While speaking during a recent company meeting at VW’s headquarters in Wolfsburg, chief human resources officer Gunnar Kilian confirmed that “around” 20,000 departures have “already been contractually agreed.” Importantly, these employees are not being made redundant, and instead, the job cuts are being made through early retirement and severance packages.
“The first measures of the ‘Future Volkswagen’ agreement are taking effect, and we are on track,” Kilian added, reports Handelsblatt. “With measurable progress in factory costs in Wolfsburg and the socially acceptable job cuts at Volkswagen AG’s six German locations alone, we are accelerating our transformation.”
Production Cutbacks and Plant Realignments
But VW’s work is far from over. The automaker is looking to lower its German production capacity by 734,000 units to better align with current demand. It’s doing this by making several alterations at multiple plants. The current Emden site will continue to build the ID.4 and ID.7, but the Osnabruck factory will stop producing the T-Roc Cabriolet in mid-2027.
In addition, VW plans to stop building the ID.3 at its Dresden factory and likely shift this site to some kind of “third-party scheme.”
Chief financial officer David Powels acknowledged that the company still has considerable ground to cover before it can call its restructuring a success. The goal is to make Volkswagen both competitive and financially sustainable by 2029.
And the tightening of belts isn’t limited to the assembly line. Recent reports indicate that VW board members will see their salaries and bonuses gradually trimmed over the next five years. Pay is set to drop by 11% in 2025 and 2026, followed by smaller reductions through 2029. All told, these cuts could save the company about €15 million, or roughly $16.2 million.
