Volkswagen to cut 35,000 jobs in Germany by 2030

Volkswagen AG has reached an agreement with labor union leaders that will see the automaker cut 35,000 jobs in Germany by 2030. The cuts, which are expected to save the company roughly $4.2 billion per year, will be achieved through a combination of gradual employment reduction, early retirement, and voluntary buyouts.

The agreement comes after months of tense negotiations between Volkswagen and its unions. Workers had staged two major strikes in the past month, the largest in the company's history, to protest the planned job cuts.

Under the terms of the agreement, Volkswagen has agreed to keep its 10 German factories open and reinstate job security agreements until 2030. However, workers have agreed to forgo some bonuses, reduce permanent employment for trainees, and cut capacity at five factories for a total of about 700,000 vehicles.

In addition to the job cuts, Volkswagen managers will also face hefty pay cuts in the coming years. About 4,000 managers will not receive bonuses equal to about 10% of their annual income next year, with small reductions through the end of the decade. Unions are also pushing for senior leadership, including CEO Oliver Blume, to take a 10% pay cut.

The job cuts and pay cuts are part of a broader effort by Volkswagen to slash costs and streamline production. The automaker is facing a steep decline in sales in China, its core market, while simultaneously facing challenges from BYD and other Chinese automakers entering the European market.

The job cuts announced this week are likely to have a significant impact on the German economy. The automotive industry is a major employer in Germany, and Volkswagen is one of the country's largest companies. In the long run, Volkswagen's job cuts are necessary to ensure the company's survival, but they will have a painful impact on the workers and their families.

Via