VW is planning dramatic job cuts: 35,000 jobs at risk by 2030!

VW is planning dramatic job cuts: 35,000 jobs at risk by 2030!

Volkswagen (VW) is facing massive job cuts in Germany. The group plans to cut a total of 35,000 jobs by 2030. Around 20,000 departures have already been contractually agreed, which means that more than half of the intended reductions have already been agreed. These cuts are part of a comprehensive restructuring program negotiated with the union in December. The goal is to make VW competitive and sustainable by 2029, as news38.de reports.

These measures affect almost 25% of the 130,000 jobs in Germany and are concentrated in the six German locations of Volkswagen AG. Redundancies for operational reasons are excluded; the reduction should mainly take place through early retirement and severance payments. This means that not only older employees, but also younger ones who leave voluntarily can benefit from severance payments, as stern.de highlights.

Background and challenges

The reasons for this drastic step are complex. VW suffers from high costs and overcapacity, especially in the e-car locations in Zwickau and Emden. Sales and profits in China are collapsing, while combustion engine models continue to sell well in Wolfsburg. Works council boss Daniela Cavallo even warns of a possible introduction of a four-day week from 2027 due to capacity utilization problems. The group also plans to relocate production of the Golf to Mexico and convert the Wolfsburg factory into an e-Golf factory.

As tagesschau.de reports, at least three VW plants are on the brink, which puts tens of thousands of jobs at risk. This announcement caught the public by surprise, but industry experts were not surprised. The deadline for a 30-year employment guarantee expired last year, meaning far-reaching changes are in sight.

Economic situation and outlook

Last year, VW achieved record sales of around 332.3 billion euros, but expectations for 2024 were revised downwards. According to current forecasts, fewer deliveries are expected as pressure from Chinese and other foreign competitors increases. Volkswagen also pays above-average salaries, while the company has to increasingly penetrate cheaper market segments.

Despite these challenges, the profit forecast remains positive and VW hopes for constructive discussions to improve competitiveness, particularly in electromobility. Chancellor Olaf Scholz has already stressed the need to secure jobs, while the Federal Ministry of Economics has announced measures to promote electric vehicles.

The coming weeks and months could be crucial for the future of VW and thousands of employees in Germany. The company is expected to provide further details on the savings on Wednesday, making the situation all the more exciting.