Fri Dec 20 20:19:36 UTC 2024: ## Volkswagen Averts Mass Layoffs, Announces 35,000 Job Cuts by 2030

**Berlin, Germany** – Volkswagen, Europe’s largest carmaker, announced a drastic cost-cutting plan Friday that will see 35,000 jobs cut in Germany by 2030. The agreement, reached after marathon negotiations with labor unions, will save the company approximately €4 billion ($4.2 billion) annually and avoids plant closures and forced redundancies, averting a major crisis.

The deal, hailed by the powerful IG Metall union, comes as a relief following weeks of rolling strikes. Volkswagen had previously threatened to shutter German production sites, a move that would have been unprecedented in the company’s 87-year history. The company cited intense competition from Chinese manufacturers, falling demand, and high labor and production costs in Europe as reasons for the restructuring.

While no plants will be completely closed, the agreement includes the cessation of production at Volkswagen’s smallest factory in Dresden by the end of 2025, affecting approximately 300 employees. Production at the Osnabrück plant will also end by mid-2027. Furthermore, production of the popular Golf model will be relocated from Wolfsburg, Germany, to Mexico. In total, Volkswagen has reduced its German production capacity by over 700,000 vehicles.

The €4 billion in savings will be achieved through a combination of reduced labor costs and headcount reduction. This includes a pay freeze for employees in 2025 and 2026, and the spreading of previously agreed bonuses over several years. Volkswagen’s brand CEO, Thomas Schaefer, stated that these tough decisions are necessary for the company’s future competitiveness.

The agreement follows a significant drop in Volkswagen’s third-quarter profit, down 64 percent to €1.58 billion. The company’s struggles have reflected broader economic challenges facing Germany, including high energy prices and a potential second consecutive year of economic contraction. The looming threat of mass layoffs had drawn significant political attention, with Chancellor Olaf Scholz voicing his opposition to plant closures. The Lower Saxony state government, a significant Volkswagen shareholder, also played a role in facilitating the agreement.

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