Volkswagen, Europe’s largest carmaker, is undergoing a major restructuring, with 20,000 workers in Germany agreeing to voluntary redundancy as part of a broader cost-cutting initiative.
The move is part of a deal struck with unions last year, aiming to reduce the company’s workforce by 35,000 employees by 2030.
The job cuts primarily affect Volkswagen’s core brand operations, accounting for approximately 30% of its workforce in Germany.
The restructuring comes as Volkswagen faces intense competition in China, its largest market, and struggles with the transition to electric vehicles (EVs).
The company has been working to streamline operations and reduce factory costs, ensuring long-term sustainability in a rapidly evolving automotive landscape.
Background of the Workforce Reduction
Volkswagen’s decision to shed 35,000 jobs by 2030 was finalized after months of negotiations with trade unions, including IG Metall.
Initially, the company considered closing factories in Germany, a move that would have been unprecedented in its history.
However, following employee walkouts and union discussions, Volkswagen opted for voluntary redundancies instead of forced layoffs.
The company’s board member Gunnar Kilian stated that the socially responsible job cuts and factory cost reductions have led to measurable progress in Volkswagen’s restructuring efforts.
Impact on Volkswagen Operations
The job cuts are expected to significantly reduce labor costs, with Volkswagen aiming to save approximately €1.5 billion annually.
The company has also announced plans to reduce the number of apprenticeships offered each year, cutting the intake from 1,400 to 600 starting in 2026.
Volkswagen’s restructuring plan, known as ‘Future Volkswagen’, includes:
- Reducing factory capacity by 734,000 units across its German plants.
- Lowering development costs to improve profitability.
- Enhancing operational efficiency to remain competitive in the global market.
Despite these measures, Volkswagen’s finance chief David Powels acknowledged that significant work remains to ensure the company’s long-term competitiveness.
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