Volkswagen to cut 35,000 jobs in €4bn annual savings drive
Volkswagen is implementing a savings plan that will affect both managers and employees. According to Deutsche Welle, reductions in executive salaries, job cuts, and the cessation of pay rises are expected to save the company €4 billion annually.
Volkswagen plans to reduce executive salaries by more than €300 million by 2030. As emphasised by Gunnar Kilian, VW's Chief of Human Resources, cuts in management will be "disproportionately high compared to the input of management and employees". The decision to limit executive salaries was driven by pressure from the IG Metall union and the works council.
According to the report, Kilian did not disclose detailed information about the number of managers affected by the changes or the exact amount of savings within management.
One of the key elements of Volkswagen's savings plan is workforce reduction. By 2030, the company plans to cut more than 35,000 jobs in its German plants. Currently, Volkswagen's six main production plants employ approximately 100,000 workers.
Additionally, Volkswagen employees agreed to forego pay rises in 2025 and 2026 in an agreement made before Christmas.
Savings plan valued at €4 billion annually
Volkswagen estimates that the savings plan will bring the company net savings of around €4 billion annually. Of this amount, approximately €1.5 billion will come from labour cost reductions. Gunnar Kilian emphasised that lowering expenses is crucial for ensuring the group's future competitiveness.
Despite the challenging changes, Kilian calls for an approach to savings with the "right spirit," viewing them as an opportunity for the company's growth. According to him, Volkswagen has already set the right course for developing products and technology.
Our vehicles are excellent. If we can now sustainably reduce costs, nothing will stand in the way of our future success – he emphasised.
