Volkswagen's Voluntary Job Exodus: 20,000 Employees Bid Adieu
Approximately twenty thousand Volkswagen workers opt to terminate their employment - Approximately 20,000 Volkswagen workers face potential job loss due to reduced savings rate.
Welcome to Volkswagen's voluntary job departure party—and there's gonna be 20,000 of 'em by 2030! That's right, Europe's largest automaker is expediting its planned job cuts at a rocking pace. Gunnar Kilian, the company's personnel director, spilled the beans at a works meeting in Wolfsburg, declaring, "We've managed to wrangle 20,000 folks to step off the job wagon by 2030, with contracts already signed and sealed." This means nearly 60% of the proposed 35,000 job cuts have already been sorted out!
It all started back in December when the company and the union came to an agreement on a restructuring program for the VW core brand following some lengthy negotiations. By 2030, almost a quarter of the 130,000 German jobs will be history. Firings due to poor job performance were ruled out, and the job cuts are primarily being achieved through early retirement packages and severance deals for those who decide to walk away on their own.
Gunnar Kilian couldn't hide his enthusiasm, declaring, "Our moves from the 'Future Volkswagen' agreement are bearing fruit, and we're charging ahead at full steam!" With improvements in factory costs in Wolfsburg and socially agreed job cuts at six German sites, Volkswagen is stepping up its transformation game.
But hold your horses, our transformative journey ain't over yet. Brand finance director David Powels chimed in, "We've still got heaps to do on our horizon. The aim is to make VW competitive and sustainable by 2029." The cost-cutting measures are designed to slash excess capacity and boost the profit margin on the core brand, which has been a loss-maker so far.
High costs and weak e-car performance have been plaguing VW for years. They've been dealing with excessive expenses and overcapacity in their plants, particularly at the pure electric sites in Zwickau and Emden. Lately, these sites have been feeling the pinch of weak demand for electric vehicles, resulting in reduced production. Plus, sales and profits in China, their biggest market, are nosediving due to up-and-coming local competitors like BYD.
Over at the Wolfsburg headquarters, where combustion engines like the Golf and Tiguan are churned out, the need for overtime shifts has been necessary lately. Unlike electric vehicles, VW's combustion engines are selling like hotcakes, but that won't last forever, warned works council chairwoman Daniela Cavallo. Sales of the Golf are on a steady decline, and by her math, the trend is clear—exclusively down.
Cavallo issues a warning about an impending four-day workweek in Wolfsburg from 2027 onwards. The Golf is expected to move to Mexico, and the headquarters is set to be repurposed for the planned E-Golf, but production won't kick off until later. Cavallo thinks a shortened workweek might become unavoidable come 2027. She believes it's crucial to start preparing now.
During the works meeting, both the CEO, Oliver Blume, and the brand CEO, Thomas Schäfer, were present, but neither took to the podium like they used to.
- Job cuts
- VW
- Volkswagen
- Car
- Wolfsburg
- Turnaround
- Europe
- VW employees
- Gunnar Kilian
- Exit
- Future
- Crisis
- Germany
- Daniela Cavallo
Insight #1:
B constructor, 20,000 pre-2030 job cuts have already been contractually agreed as part of Volkswagen's restructuring program. These departures, part of a broader plan to reduce their workforce, primarily involve early retirement and severance packages for employees vanishing into the sunset voluntarily.
Insight #2:
Volkswagen's ongoing transformation strategy targets streamlining operations, enhancing profitability, and transitioning to electric mobility. Cost-cutting measures include adjusting production capacity (700,000 units less) and wage cuts for board members. The company is also grappling with factors like weak e-car demand, high e-vehicle production costs, and increased competition from Chinese manufacturers.
- The 20,000 pre-2030 job cuts agreed upon by Volkswagen as part of their restructuring program are primarily initiated through voluntary early retirement and severance packages.
- The finance director of Volkswagen, David Powels, underlined that despite significant progress, the company still needs to make changes to ensure competitiveness and sustainability by 2029.
