Leading German car manufacturer Volkswagen AG has announced that nearly 20,000 company employees have agreed to voluntary early retirement by the end of the decade as part of a planned production restructuring. This is reported by Bloomberg, according to UNN.
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The automaker is restructuring its operations in Germany to cope with uneven demand for its vehicles.
The company's restructuring is proceeding as planned, Volkswagen human resources director and board member Gunnar Kilian told employees at a meeting in Wolfsburg on Tuesday.
Thanks to the noticeable progress in reducing factory costs in Wolfsburg and socially responsible job cuts at only six German Volkswagen AG plants, we are accelerating our transformation. About 20,000 layoffs from the company by 2030 have already been contractually agreed
Europe's largest automaker is cutting production capacity and headcount due to rising costs, falling demand in Europe and the rapid growth of Chinese competitors.
In December, VW brand management and union leaders reached an agreement to reduce production capacity in Germany by more than 700,000 units and reduce headcount by 35,000 jobs by the end of the decade. Related brands Audi and Porsche are also cutting jobs to reduce costs.
After four fruitless rounds of negotiations, which were accompanied by meetings between the concern's management and the labor collective and two warning strikes, a compromise was reached during the fifth round, which lasted a total of 70 hours. It testifies to the depth of the crisis in which the Volkswagen Group concern and especially its main division, Volkswagen AG with the VW brand, finds itself, as well as the readiness of both parties, the employer and the labor collective, for radical reforms.
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They agreed on truly large-scale solutions. None of VW's 10 car factories in Germany will be closed, but the number of employees, which currently exceeds 120,000, will decrease by more than 35,000. This reduction will not happen immediately, but over five years, until 2030. Therefore, there will be no mass layoffs at Volkswagen.
Management has committed to a "socially acceptable" reduction in staff. This means that positions that become vacant will be eliminated, or, for example, the number of apprentices in production will be reduced. At the same time, production capacity will also decrease.
According to Volkswagen Group CEO Oliver Bloom, Volkswagen will be able to save around 15 billion euros per year in the medium term. Of these, 4 billion euros will be obtained through measures that are somehow related to personnel. After all, the agreements reached provide not only for staff reductions. Workers refused to increase wages, and approximately 4,000 managers will have their bonuses cut.
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Let us remind you
Volkswagen has stated that it is ready to consider the possibility of creating equipment for the German army as part of Europe's rearmament efforts. This is happening against the backdrop of the alliance between Europe and the US becoming increasingly fragile due to the actions and statements of US President Donald Trump.