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Volkswagen Strikes Deal To Cut 35,000 Jobs In Germany By 2030
Volkswagen AG has established a deal with union leaders that will lead to the elimination of 35,000 jobs in Germany by 2030. This move is anticipated to save the automaker approximately €3.79 billion annually, achieved through gradual workforce reductions, early retirements, and voluntary buyouts.
This agreement follows several months of intense discussions between Volkswagen and its unions, which included two significant strikes in the past month—the largest in the company’s history—aimed at opposing the job reductions.
As part of the deal, Volkswagen will maintain all 10 of its German factories and extend job security agreements until 2030. In return, workers will renounce certain bonuses, limit permanent employment options for trainees, and reduce production capacity at five plants, resulting in a decrease 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.
