Volkswagen Plans Salary Freeze Until 2030 for 660,000 Employees Worldwide

Volkswagen plans to freeze salaries for around 660,000 employees worldwide until 2030, according to its Global Works Council, which confirmed the reported proposal on October 19, 2026. The German automaker has not publicly confirmed the plan as a final decision, while employee representatives have warned of strong opposition.

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Works Council and IG Metall Oppose Proposal

According to Reuters, the Global Works Council received internal information about the executive board’s plans to suspend salary increases. German trade union IG Metall criticised the proposal, saying pay increases should be decided through negotiations rather than management directives.

The report said Volkswagen declined to comment on what it described as speculation. A company spokesperson said discussions scheduled for later in the week would provide the forum for proposals on labour costs.

The reported plan could affect employees’ purchasing power if salaries remain unchanged while living costs rise.

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A report by German newspaper Süddeutsche Zeitung, cited by Reuters, estimated that the absence of pay increases could result in income losses of around 10% for affected employees by 2030 due to inflation. This is an estimate, not a confirmed outcome.

Volkswagen’s Wider Cost-Cutting Measures

The salary freeze report comes amid Volkswagen’s ongoing cost-reduction and restructuring efforts.

In December 2024, Volkswagen reached an agreement with IG Metall and employee representatives to suspend collectively agreed wage increases for 2025 and 2026, with provisions for subsequent years linked to workforce-reduction measures.

That agreement also included plans to reduce the workforce at Volkswagen’s German sites by more than 35,000 employees by 2030 through socially responsible measures.

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These existing commitments are separate from the newly reported proposal concerning salaries across the global workforce.

Volkswagen is also seeking changes to existing collective agreements in Germany. In September 2026, the company announced the termination of several agreements effective December 31, 2026, to create room for further negotiations.

The company said the existing agreements would continue to apply for the time being under applicable legal requirements.

For HR leaders, the development highlights the challenges of managing labour costs while maintaining employee relations, purchasing power and collective bargaining arrangements during business restructuring.

The proposed global salary freeze remains subject to clarification and negotiations.

Volkswagen’s final position and the outcome of discussions with employee representatives will determine how the reported plan affects employees.