Volkswagen accelerates restructuring with 20,000 workers agreeing to leave

Volkswagen AG revealed that approximately 20,000 employees have agreed to leave the company voluntarily by 2030 as part of its ongoing restructuring efforts to address fluctuating demand for its vehicles in Germany.

Speaking at a workers’ assembly in Wolfsburg on June 3, Gunnar Kilian, Volkswagen’s head of human resources and board member, confirmed that the company’s restructuring plans are progressing as expected, Caliber.Az reports, citing foreign media.

“We are making measurable progress in reducing factory costs in Wolfsburg while implementing socially responsible job cuts at Volkswagen’s six German sites,” Kilian said. “So far, contracts have been signed for around 20,000 voluntary departures by 2030.”

This number accounts for a significant portion of the 35,000 job cuts Volkswagen has committed to in Germany by 2035 as it aims to boost profitability.

The reduction, affecting Volkswagen’s total German workforce of 130,000, was agreed upon by management and trade unions last December after multiple negotiation rounds.

Volkswagen emphasised that no layoffs for operational reasons will take place; the workforce reduction will mainly occur through early retirements and severance packages.

Kilian added, “Our ‘Future Volkswagen’ measures are taking shape, and we remain on track. Progress in lowering costs and job reductions is helping to accelerate our transformation.”

However, Volkswagen’s Chief Financial Officer, David Powels, cautioned that significant challenges remain. He noted the need to tackle “excessive investments, low returns on electric vehicles, and a break-even point that remains too high” to keep Volkswagen competitive by 2029.

As Europe’s largest automaker, Volkswagen is scaling back production capacity and headcount in Germany due to increasing costs, weaker European demand, and growing competition from Chinese manufacturers.

In December, VW’s brand management and labour representatives agreed to reduce German production capacity by over 700,000 units and cut 35,000 jobs by the decade’s end. Volkswagen’s sister brands, Audi and Porsche, are also implementing job cuts to reduce expenses.

At the assembly, Powels highlighted the need for continued efforts to ensure the company’s long-term competitiveness and financial health.

By Tamilla Hasanova