Thousands of Volkswagen employees will leave the company voluntarily by the end of the decade as the carmaker looks to cut its costs amid declining sales.
The details: The downsizing of VW’s workforce will cover about 20,000 workers currently employed with the company as part of the automaker’s aggressive restructuring plan.
The move is focused on reducing VW’s Germany’s production output by 700,000 units—and reduce the company’s overall employee numbers by 35,000 by 2030.
Reductions in the VW’s workforce will come via early retirement, normal retirement or termination agreements—with the majority of the exits being voluntary departures or early retirement.
Audi and Porsche—both owned by the Volkswagen Group—are also cutting their workforce to deal with changing market conditions.
What they’re saying: “With measurable progress on factory costs in Wolfsburg and socially responsible job cuts at Volkswagen AG’s six German sites alone, we are accelerating our transformation. Around 20,000 departures from the company by 2030 have already been contractually agreed,” said Gunnar Kilian, Head of Human Relations and Board Member for VW.
Why it matters: Cutting 20,000 jobs will save VW money, but it doesn't solve the company's main problem. Chinese competitors can sell similar electric cars for much less, and VW is still losing money on its EVs. The job cuts buy some time, but the company still needs to find a way to make electric vehicles profitably while competing with rivals who have much lower costs.
Between the lines: News of the voluntary employee exits (to be completed by 2030) is one of many recent moves being made by VW to meet the demands of rapidly shifting market dynamics—spanning divestitures in its European operations to new investments in the U.S. market.
There have been reports that Volkswagen is considering selling off its design and engineering unit, Italdesign, as part of its efforts to revamp its European operations.
On the other hand, the German automaker is planning to make several major investments in the U.S.—including its Audi brand expanding its production in the U.S.
Bottom line: While VW moves aggressively to cut costs in Germany, it’s signaling a pivot—moving to shed legacy assets in Europe and doubling down on U.S. investments amid growing concerns over tariffs.
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