Volkswagen Explores €4 Billion Cost-Cutting Plan, Including Potential Salary Reductions

Volkswagen is evaluating extensive cost-reduction initiatives, with reports from Handelsblatt indicating plans to achieve €4 billion in savings for its main brand. The proposed measures include a possible 10% reduction in wages and a two-year salary freeze.

The German automaker’s management is seeking ways to reduce expenditures amid growing economic challenges. Staff members have responded critically to these proposals, calling for more transparent strategic planning. The cost-saving framework under consideration encompasses several measures, such as bonus restrictions for senior personnel, reduced anniversary payments, and the possibility of shuttering certain German facilities.

Sources familiar with the matter indicate that discussions are currently underway with both the influential IG Metall labor union and the company’s works council. When approached for comment, a Volkswagen spokesperson provided no statement regarding these negotiations.

Since early October, the company has conducted weekly discussions with German facility representatives to identify potential cost reductions and determine optimal vehicle production allocation across locations.

These cost-saving discussions are proceeding independently from upcoming wage negotiations, which are set to continue on October 30. The company’s aggressive pursuit of savings reflects its ongoing challenges in managing operational expenses while dealing with market uncertainties.