Europe’s largest carmaker VW has said about 20,000 employees have agreed to voluntarily leave the company by the end of the decade, as it looks to cut 35,000 jobs in Germany by 2030.
Gunnar Kilian, Volkswagen’s head of human relations, told a workers’ assembly in the company’s main plant in Wolfsburg that the agreed departures meant that the company’s restructuring plans were on track.
He told staff: “With measurable progress on factory costs in Wolfsburg and socially responsible job cuts at Volkswagen AG’s six German sites alone, we are accelerating our transformation,” Kilian said. “Around 20,000 departures from the company by 2030 have already been contractually agreed.”
Manufacturing job cuts
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VW brand management and labour leaders struck a deal in December to cut German production capacity by more than 700,000 units and reduce headcount by 35,000 jobs by the end of the decade in response to the shift to electric vehicle production, the rise of competition from China in the EV market and lower demand in Europe. Sister brands Audi and Porsche are also cutting jobs to reduce costs.
Chief financial officer David Powels at VW said the company needed to address “excessive investment, low returns on electric vehicles and a break-even point that is too high.”
In Germany, under mutual termination agreements (aufhebungsvertrag) the employer and employee agree to end the employment relationship voluntarily, with the level of severance pay determined by contracts and negotiation.
A VW spokesperson said the firm would “continue to offer partial retirement, retirement plans, and termination agreements to sustainably reduce indirect personnel costs as part of the comprehensive restructuring.” However, employees who opted for partial retirement or a retirement plan receive no additional severance pay. Around two-thirds will enter partial retirement, according to the Bild newspaper.
The amount of the severance payments – reportedly up to €400,000 – depends on how long someone has been working for the carmaker.
VW employs about 679,000 people globally, and 296,000 in Germany. The Wolfsburg factory – built in the 1930s and until 2022 the largest manufacturing plant in the world – employed about 62,000 people in 2023. It was long associated with the VW Beetle, produced there until 1974, when the VW Golf took over.
Meanwhile, Volkswagen’s restructuring of its Wolfsburg plant from 2027 to make way for EV-only production was likely to see a temporary four-day working week at the plant, works council chief Daniela Cavallo told workers on Tuesday.
Cavallo, the lead negotiator in talks with management last year over cost cuts, said unions had agreed minimum capacity for the transition period, but urged workers to take extra shifts in the run-up to compensate for the likelihood of fewer working hours in years to come.
“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 said.
The deal VW struck with unions last December to cut costs in Germany included moving production of the combustion engine Golf from Wolfsburg to Mexico from 2027. Golf production globally, most of which was concentrated in Wolfsburg, has declined from over a million in 2015 to just over 300,000 in 2024.
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