Around 20,000 Volkswagen workers in Germany have so far agreed to take voluntary redundancy as part of a major overhaul aimed at cutting costs, the struggling auto titan said Tuesday.
Europe’s biggest carmaker, hit by fierce competition in its key market of China and a stuttering shift to electric vehicles, struck a deal with unions last year for massive job cuts in its home market.
Some 20,000 workers had so far accepted redundancy offers, out of a total of 35,000 due to be shed by 2030 under the agreement, the 10-brand group said. The total figure represents a quarter of the Volkswagen brand’s workforce.
The jobs are being cut at the carmaker’s core Volkswagen brand, and amount to about 30 percent of its workforce in Germany.
Volkswagen plans to slash capacity by over 700,000 units, while its other brands, including Audi and Porsche, have also been trimming costs by cutting thousands of jobs. The redundancies and retirements, as opposed to layoffs, to meet Volkswagen’s headcount reduction target are due to strong German labor laws that make it harder to dismiss employees en masse.
“We are on track,” VW board board member Gunnar Kilian said at a meeting with staff at the company’s historic headquarters in Wolfsburg, western Germany.
He said the “socially responsible” job cuts as well as reductions in factory costs added up to “measurable progress.”
Volkswagen dropped a bombshell last year when it said it was mulling closing factories in Germany for the first time in its history.
But after months of talks with unions and a series of walkouts, it decided against shuttering any plants, instead striking the agreement to cut jobs through voluntary redundancies.
The Volkswagen brand has grappled with overinvestment and low returns on its electric vehicles, prompting a slew of changes.
While the German auto giant navigates an overhaul within the company, it might also have staff working fewer days from 2027 onwards. As part of restructuring efforts, Wolfsburg, Volkswagen’s biggest plant, could turn to a four-day workweek as it focuses only on EV production, works council head Daniela Cavallo said on Tuesday, according to Reuters.
“We have to make provisions now so that we can draw on them later … From 2027 onwards, a temporary four-day week is not an unreasonable scenario,” Cavallo told workers.
