The Volkswagen Group is making faster progress than expected with its job cuts. According to the company, the departure of 20,000 employees has already been agreed. A total of 35,000 jobs will be eliminated. The criticism came from the works council, which reported that the austerity measures have disrupted operations.
Volkswagen is making faster progress than expected with its restructuring plan.
The automaker is currently burdened with high costs and overcapacity.
The VW workers’ council is criticising the noticeable effects of austerity measures on operations.
Over 20,000 Departures Already Finalised
Europe’s largest automaker, Volkswagen, is making faster progress than expected with its planned job cuts.
Gunnar Kilian, Chief Human Resources Officer, stated at a work conference in Wolfsburg that around 20,000 departures from the firm had already been contractually agreed to by 2030. This means that more than half of the 35,000 job losses scheduled for 2030 have already been approved.
After a long struggle, the company and the union agreed in December to a restructuring program for the core VW brand.
By 2030, around a quarter of Germany’s 130,000 jobs are expected to be lost. Layoffs have been ruled out, with the cuts mainly being achieved through early retirement and severance payments. The group has further expanded its partial retirement program and is also offering severance payments to young employees who leave voluntarily.
The brand’s CFO, David Pauwels, said that the austerity measures had not yet reached their goal: “But we still have a lot of work ahead of us.” The goal is to make Volkswagen competitive and sustainable by 2029.
Challenges Facing Volkswagen
High costs and overcapacity weigh on VW
The Wolfsburg-based core brand has been plagued for years by high costs and overcapacity at its plants. The clean-electric locations in Zwickau and Emden in particular have recently been hit by weak demand for electric cars and have had to cut production. In addition, the group is seeing sales and profits fall in its most important market, China, as domestic competitors such as BYD are overtaking it.
At the main Wolfsburg plant, where only combustion engines such as the Golf and Tiguan are built, the company has also recently had to schedule extra shifts. Unlike electric cars, VW’s combustion engines are currently selling well. But that won’t last long, works council chair Daniela Cavallo warned. Golf sales will continue to fall, she said, according to an intranet report obtained by the German press agency. “This trend is inevitably downward.”
Works Council Reports Disruptions and Chaos
Works council criticizes consequences of cost-cutting measures in daily work
Cavallo also criticized the annoyances in daily work in Wolfsburg due to cost-cutting measures. Cavallo complained that the offices were rarely cleaned, and that a coworker brought her vacuum cleaner to work and cleaned them herself. After the boss asked her to return to the office, the cafeteria had long lines. There was a shortage of staff, not enough food, and very few seats.
Cavallo complained that production disruptions were frequent. “The equipment was never working, there were no spare parts, the whole factory was in disarray, nothing was stable here anymore!” Cavallo was quoted as saying. Additional changes were needed to make up for the lost production.
Conclusion
Volkswagen is accelerating its job cuts as part of a major restructuring plan, with 20,000 employee departures already agreed out of a targeted 35,000 by 2030. The cuts aim to reduce high costs and overcapacity, mainly through early retirement and severance, drawing criticism from the workers’ council over operational disruptions.
The corporation did not immediately respond to the allegations.