Volkswagen Group confirmed on Tuesday that around 20,000 employees will voluntarily leave the company by 2030 as part of its sweeping restructuring plans aimed at reducing factory costs and adapting to shifting global demand.
The job cuts, part of a broader agreement made in December to trim 35,000 positions and scale back production by over 700,000 units, reflect a strategic shift at Europeโs largest automaker. The cuts, which will affect about a quarter of the VW brandโs German workforce, are being implemented through early retirements, standard retirements, and severance agreements.
โWith measurable progress on factory costs in Wolfsburg and socially responsible job cuts at Volkswagen AGโs six German sites alone, we are accelerating our transformation,โ said Gunnar Kilian, Volkswagenโs Human Resources Chief and board member, during a company assembly at its Wolfsburg headquarters.
Volkswagen, which employs over 120,000 people in Germany under the VW brand alone, is grappling with rising operating costs, lagging electric vehicle (EV) profitability, and stiff competition from Chinese automakers. Kilian assured workers the departures had already been contractually agreed and emphasized they are โsocially responsible.โ
The majority of these exits are expected through retirements, though the automaker has not disclosed how many employees will receive severance packages. In 2023, Volkswagen earmarked โฌ900 million for voluntary exit payments and related restructuring costs.
Also addressing employees, VW Brand Chief Financial Officer David Powels acknowledged the urgency behind the transformation. โWe need to address excessive investment, low returns on electric vehicles, and a break-even point that is too high,โ he said.
Volkswagenโs sister brands, Audi and Porsche, are also undergoing headcount reductions as the company pushes for leaner operations in response to global market pressures.
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