Volkswagen Announces Major Job Cuts In Cost-Saving Move

Volkswagen revealed some significant changes to its domestic operations on Friday. The carmaker announced that it will reduce capacity in its German operations and lay off over 35,000 employees in the upcoming years.

To prevent widespread strikes, the company was able to reach an agreement with the unions, according to Reuters. The deal was dubbed a "Christmas miracle" by union leaders following 70 hours of talks with the company. VW also backed off from its demand for a 10% wage cut and stated that there would be no immediate site closures or layoffs.

Notably, since September, Volkswagen has been discussing what steps it must do to compete with its Chinese rivals with union leaders. The company has been having trouble because of the poor public acceptance of electric vehicles and the weak demand in Europe.
About 100,000 workers have participated in two different strikes in the past month to oppose measures to reduce expenses. These were the biggest strikes in the history of the company.

Issuing a statement, Volkswagen CEO, Oliver Blume said, “With the package of measures that has been agreed, the company has set a decisive course for its future in terms of costs, capacities and structures. We are now back in a position to successfully shape our own destiny.”

The German automaker added that it is looking into options for its Dresden factory and repurposing its Osnabrueck facility, and that this deal will help it save €15 billion a year in the medium term. It also said that there won't be any significant impact on its guidance for 2024. The facility will likewise stop producing vehicles by the end of 2025.