Pay freeze planned until 2030

Volkswagen intends to freeze the pay of many of its roughly 600,000 employees worldwide until 2030, the Süddeutsche Zeitung reported, citing internal documents prepared for the group's global top management. The paper said it had access to the documents, which describe a "Pay freeze until 2030" under negotiating guidelines that would apply from the fourth quarter. Volkswagen told the paper it would not comment on "such speculation", and said the upcoming negotiating round was the place to discuss internal arrangements of any kind. Economic researchers expect price increases of around 3% this year and next, so a multi-year freeze could mean a real income loss of up to 10% for the affected staff.

Cuts beyond wages

According to the paper, the wage freeze is part of the "Group Target Picture" overhaul led by CEO Oliver Blume. The documents also call for lower variable pay, higher productivity, more time flexibility and further job reductions, and they justify the measures by pointing to the "critical situation of the VW Group". Four plants are described as being on the brink: Emden, Hannover, Zwickau and Audi's plant in Neckarsulm. Tagesspiegel and Rzeczpospolita put the possible closures in 2031 to 2034. The supervisory board decided in early September to cut a further 50,000 jobs worldwide over the coming years, on top of 50,000 positions already agreed, and reports give a total of up to 100,000 jobs to be removed.

Volkswagen cost-cutting milestones
  1. Supervisory board decides to cut 50,000 more jobs worldwide
  2. Volkswagen terminates almost all collective agreements
  3. New negotiating guidelines with a pay freeze until 2030 are due to apply
  4. Strikes in the metal industry become possible
  5. Strikes at Volkswagen become possible

Workforce and the 2024 savings package

Reports put Volkswagen's workforce at around 600,000 worldwide and 275,000 in Germany. Of the German staff, 130,000 employees covered by company-level agreements had already given up a 5.5% raise agreed in the 2024 savings package, the Süddeutsche Zeitung reports. At the end of September the company had also terminated almost all of its collective agreements, according to Berliner Zeitung. Volkswagen is under pressure from US tariffs, weakness at its Audi and Porsche units and problems in its China business, the paper says.

Volkswagen workforce by scope (employees)
Worldwide600,000Germany, total275,000Germany, company-level agreement130,000

Union response

IG Metall is demanding a 5% pay rise in the bargaining round now starting at Volkswagen. Works council chair Daniela Cavallo told the Süddeutsche Zeitung that the board must do its homework.

If unfair competition from China and the USA is not stopped and the board does not do its homework, all personnel savings will not help.

— Daniela Cavallo

According to the report, strikes are possible in the metal industry from November and at Volkswagen from January. Lower Saxony negotiator Thorsten Gröger has already announced such action. Volkswagen has not confirmed the plan, and the figures come from internal papers seen by the newspaper rather than from a published company document.