Volkswagen parts with 20 thousand employees as part of a large-scale optimization program

The German carmaker Volkswagen has reached an agreement on the termination of labor contracts with 20 thousand employees in Germany. Layoffs will take place on a voluntary basis with compensation, which, depending on the length of service, can reach up to 400 thousand euros. Most of the employees — about two-thirds-will leave the company as part of early retirement.

These steps are part of a large-scale cost optimization and restructuring program aimed at improving the sustainability of the business in the context of the global transformation of the automotive industry. According to the plan, by 2030 Volkswagen will cut up to 35 thousand jobs, mainly at factories in Germany.

One of the ways to reduce costs will be to reduce the number of places for interns-from 1,400 to 600 from 2026, which, according to the company's estimates, will save up to 1.5 billion euros annually.

Additionally, about 130,000 employees of the concern agreed to a salary freeze and the refusal of vacation payments in the amount of $ 1,380. According to the IG Metall trade union, the package of measures adopted allowed avoiding the closure of factories in the country and preserving the production base.

In the near future, the company will begin separate negotiations on early retirement programs for employees born in 1969 and 1970.

Experts consider this agreement as one of the largest social packages in the history of German industry. Despite the cuts, it passes without forced layoffs, which allows Volkswagen to maintain its reputation as a socially responsible employer during the period of economic restructuring.