Volkswagen is Cutting 10% of its German Workforce and Slashing Wages

Volkswagen Group has announced a drastic restructuring plan that includes cutting approximately 35,000 jobs in Germany by 2030.

This decision marks a historic shift for Europe’s largest automaker as it struggles with high manufacturing costs, fierce competition from Chinese electric vehicle (EV) manufacturers, and a sluggish global transition to battery-powered cars.

Unprecedented Plant Closures and Job Cuts

For the first time in its 87-year history, Volkswagen is considering the closure of at least three factories on German soil.

The proposed workforce reduction represents about 10% of its total German staff.

Daniela Cavallo, the head of the company’s powerful works council, revealed that management intends to downsize all remaining domestic plants, reduce production capacity, and outsource several internal departments.

Beyond the 35,000 job losses, the company is also pushing for a 10% wage cut for remaining employees and a two-year freeze on pay increases.

Volkswagen Economic Headwinds and the EV Transition

The restructuring is driven by a significant decline in demand across Europe and a loss of market share in China, formerly Volkswagen’s most profitable market.

CEO Oliver Blume stated that the German automotive industry is in a “very demanding and serious situation.”

The cost of energy and labor in Germany has made the brand less competitive compared to Tesla and emerging Chinese brands like BYD.

VW’s operating margins have tightened, leading the board to conclude that “business as usual” is no longer sustainable.

Union Resistance and the Threat of Strikes

The announcement has sparked a fierce standoff between corporate leadership and labor unions.

IG Metall, Germany’s largest industrial union, has labeled the plan a “historic blow” to the workforce and has threatened nationwide strikes starting in December.

Union leaders argue that workers should not pay the price for management’s perceived strategic failures in the EV transition.

Despite the cuts, Volkswagen maintains that this “Performance Program” is essential to free up billions of euros for future investment.

The company aims to reinvest savings into software development and next-generation battery technology to remain a global player in the 2030 automotive landscape.

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