Volkswagen plans another 12,000 job cuts, putting pressure on unions
Volkswagen’s cost-cutting programme is becoming increasingly severe. The German carmaker plans to eliminate another 12,000 jobs by 2030, on top of the more than 35,000 cuts previously agreed. In total, more than 47,000 jobs at Volkswagen AG are at risk. Meanwhile, the group wants to use public funds to help finance employee departures, triggering a sharp confrontation with unions.
Earlier agreement no longer enough
According to a Volkswagen press release, the company’s financial situation has deteriorated significantly since the agreement reached at the end of 2024. Human resources chief Arne Meiswinkel stressed that the group must reduce labour costs as quickly as possible to remain competitive.
Volkswagen and the IG Metall union agreed in December 2024 to eliminate more than 35,000 jobs in Germany by 2030. In return, the company pledged to avoid compulsory redundancies on economic grounds.
Management now wants to reduce Volkswagen AG’s workforce by another 12,000 people. The change affects Volkswagen’s passenger car and commercial vehicle divisions, component production and central group functions.
The company intends to use voluntary severance packages and specialist transition companies to help employees acquire new skills and find their next job.
The latter approach is proving contentious, however, because Volkswagen also wants to use public funds to finance it.
Union threatens strike action
IG Metall regards Volkswagen’s new approach as a breach of earlier agreements. The union believes the company is trying to shift part of its restructuring costs onto society.
Adding to the tensions is Volkswagen’s decision to terminate ten collective agreements at the end of 2026. These govern matters including pay, working hours and additional benefits.
However, the agreement on future job protection remains in force, and the ban on compulsory redundancies on economic grounds applies until the end of 2030.
IG Metall is demanding that the decision to terminate the collective agreements be reversed by the end of October. Otherwise, Volkswagen faces a major labour dispute in January 2027.
The first formal negotiations begin on 24 November in Emden and continue on 15 December in Zwickau.
Volkswagen must save €31 billion by 2030
The additional job cuts form part of Volkswagen’s extensive Future Plan 2030 restructuring programme.
The group aims to reduce production and value-chain costs by around €20 billion and overheads by a further €11 billion by 2030.
Pressure is coming from several directions. Chinese carmakers are gaining market share, US import tariffs are reducing profitability, and electric vehicle development continues to require substantial investment.
Volkswagen’s problems also stem from underutilisation of its European factories. The group estimates that production capacity exceeds the region’s actual needs by around 500,000 cars a year.
As a result, the plants in Emden, Zwickau and Hanover, as well as Audi’s Neckarsulm plant, face the longer-term prospect of an end to their current car production unless the company finds new, competitive activities for them.
European car industry’s competitiveness under pressure
Volkswagen’s restructuring shows how rapidly the European car industry’s established business model is changing. High labour and energy costs, together with Chinese manufacturers’ faster development cycles, are forcing even Europe’s largest automotive group to overhaul its operations.
Volkswagen plans to reduce its model range and simplify production to increase production volumes for the remaining models and cut fixed costs.
For European buyers, this does not necessarily mean cheaper cars. A smaller model range and more efficient production could improve profitability, but price competition is still being driven by pressure from Chinese manufacturers.
Volkswagen faces a difficult choice: it must cut costs quickly, but a major labour dispute could disrupt production just when the group desperately needs stability.
