Volkswagen To Cut 35,000 Jobs In Germany As Cost-Cutting Plan Gains Pace

Last Updated:June 26, 2026, 17:22 IST

Volkswagen accelerates restructuring, plans about 35,000 job cuts in Germany by 2030 via voluntary exits, targeting 1.5 billion euros in annual savings.

German auto giant Volkswagen is accelerating one of the biggest restructuring drives in its history, with around 35,000 jobs set to be cut in Germany by 2030 as the company looks to reduce costs and improve competitiveness.

The company said about 20,000 employees have already agreed to leave voluntarily through early retirement and severance packages, putting Volkswagen ahead of schedule in implementing the workforce reduction plan.

Part Of Wider Cost-Cutting Drive

The job cuts are part of an agreement reached between Volkswagen and labour unions late last year after months of tense negotiations over the automaker’s restructuring plans.

Rather than resorting to compulsory layoffs or factory closures in Germany, the company opted for voluntary departures while reducing production capacity and streamlining operations.

Billions In Savings Targeted

Volkswagen aims to achieve annual cost savings of around €1.5 billion through the restructuring programme. The company is also reducing production capacity at several German plants as it adjusts to weaker demand in Europe and increasing competition from Chinese electric vehicle manufacturers.

Executives say the measures are necessary to strengthen Volkswagen’s position as the global auto industry shifts toward electric vehicles and software-driven mobility.

Challenges Mount For Europe’s Largest Carmaker

Volkswagen has been under pressure from slowing EV demand in Europe, rising production costs, and aggressive pricing by Chinese automakers both in Europe and overseas markets.

The company has also faced declining profit margins in its core passenger car business, prompting management to launch sweeping efficiency measures across its German operations.

No Forced Layoffs Planned

Volkswagen said the workforce reduction will continue to be implemented through voluntary exits, with no compulsory redundancies planned under the agreement with employee representatives.

The restructuring is one of the most significant overhauls undertaken by the company in decades as it seeks to safeguard its long-term competitiveness while navigating the transition to electric mobility.

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