Volkswagen will cut 35,000 jobs in Germany until 2030

The Volkswagen automotive group will cut more than 35,000 jobs in Germany until 2030 and reduce technical capacity of its factories but will keep them all open after reaching an agreement with the IG Metall union.

In a statement on Friday, the company said the job cuts will be made in a “socially acceptable” manner and will save about $1.5 billion a year in labor costs.

Meanwhile, the technical capacity of the plants will be reduced to around 734,000 vehicles per year, equivalent to almost the entire volume of the Wolfsburg site, to adapt to the “decline of the automotive market in Europe and increasingly intense competition”.

The agreement avoids the closure of plants, but provides concrete adaptation measures for the majority of car plants in the country.

For Osnabrück the company is examining “options for alternative use”, although it will continue to produce the T-Roc cabrio until mid-2027, while in Dresden alternative options will be developed when production ceases at the end of 2025. In Wolfsburg, production will be reduced from four assembly lines to two, while technical development will be restructured and around 4,000 jobs will be cut by 2030.

In Emben, the production of the models ID.7 Sedan, ID.7 Tourer and ID.4 will be ensured after the “facelift”, while in Zwickau production will be concentrated on a single line starting from 2027.

In the sector of commercial vehicles, concrete cost reduction measures will be implemented with a plant in Hanover, while in the group’s components division, the company expects to save around 3 billion euros by 2030 through the reduction of approximately 500 million euros in annual labor costs.

Return of the job guarantee

As reported by the IG Metall union, the agreement will reintroduce the guarantee that protects workers from dismissal for company reasons until 2030, after it was eliminated in September.

As for wages, workers will not receive the 5% industry wage increase agreed with the union, but this will go into a fund to finance the reduction of working hours, as proposed by IG Metall.

Also, the employees they will give up the May bonus in 2026 and 2027 and will not have the Christmas bonus in 2025 and 2025.

LCEO of Volkswagen, Oliver Blume, said the deal “is an important signal for the future viability of the brand,” with which the company has set “a decisive course for its future in terms of costs, capabilities and structures.”

For his part, the chief trade union negotiator Thorsten Gröger declared that the package includes “painful contributions from workers”, but at the same time creates “prospects for the workforce”.

Three months of negotiations

Volkswagen and workers have been negotiating collective bargaining and a cuts plan in Germany since September.

The company had initially proposed a 10% wage cut in addition to the closure of at least three of its ten factories and the downsizing of the others, which would have led to a reduction in the workforce of approximately 55,000 employeessaid Gröger. IG Metall, for its part, started by proposing a 7% wage increase, and then put on the table a plan to save around 1.5 billion euros in salary costs.

Between January and September 2024 Volkswagen earned 33.1% less than the previous year, after sales fell by 4.4% due to the collapse of the Chinese market and a slower transformation towards electric mobility than as initially expected.