Volkswagen unveils bold €4 billion savings plan with job cuts
Volkswagen is implementing a savings plan that includes both managers and employees. Reductions in executive salaries, job cuts, and the abandonment of raises are expected to save the company 4 billion euros annually, reports "Deutsche Welle".
Volkswagen plans to decrease executive salaries by more than 300 million euros by 2030. Gunnar Kilian, VW's chief of human resources, emphasized that the cuts in management will be "disproportionately high compared to the input of management and employees." This decision was driven by pressure from the IG Metall union and the works council.
Kilian did not disclose detailed information regarding the number of managers affected by the changes or the specific amount of savings expected from management, according to the report.
A key element of Volkswagen's savings plan is workforce reduction. By 2030, the company plans to cut over 35,000 jobs in its German plants. Currently, Volkswagen's six main production plants employ approximately 100,000 workers.
Additionally, as part of an agreement made before Christmas, Volkswagen employees agreed to forgo pay raises in 2025 and 2026.
Savings plan valued at 4 billion euros annually
Volkswagen estimates that the savings plan will result in net savings of around 4 billion euros annually. Of this amount, approximately 1.5 billion euros will come from reductions in labor costs. Gunnar Kilian emphasized that lowering expenses is crucial for ensuring the group's competitiveness in the future.
Despite the significant changes, Kilian calls for approaching these savings with the "right spirit," viewing them as an opportunity for the company's growth. According to him, Volkswagen has already set the right course for the development of products and technology.
Our vehicles are excellent. If we can now sustainably reduce costs, nothing will stand in the way of our future success, he emphasized.
