The restructuring of Volkswagen has entered a decisive new phase, with Europe’s largest carmaker confirming that more than 25,000 employees in Germany have already agreed to leave the company. The figure, which corresponds to roughly 70 percent of the planned staff reduction, shows how quickly the group is moving to reshape its cost structure and respond to increasing pressure in the global automotive market.
The plan, negotiated with IG Metall in late 2023, aims to eliminate around 35,000 positions at German sites by 2030. Although the scale of the program was widely known, the speed of its implementation had not been publicly disclosed until now.
Rapid progress in workforce reduction
According to the company, Volkswagen has secured contractual exit agreements with more than 25,000 employees across its ten German locations. Compared to the end of 2023, the active workforce is already smaller by over 11,000 people. The group spokesperson confirmed that the departures are proceeding faster than originally expected, following widespread interest in early retirement, partial retirement and voluntary severance packages.
This progress marks a significant milestone for a company that has struggled for years with high fixed costs, internal bureaucracy and slower decision-making compared to competitors—particularly in the transition toward electric mobility.
Sharp cost reductions at key factories
Brand chief Thomas Schäfer emphasized that the restructuring measures are starting to deliver tangible financial results. Production costs at major plants—Wolfsburg, Emden and Zwickau—have dropped by nearly 30 percent on average.
Beyond the financial metrics, Volkswagen has also overhauled internal processes. One in three committees within the brand’s organizational structure has been dissolved, a move intended to shorten approval chains and accelerate operational decisions. The company stresses that all German sites now operate under updated agreements negotiated with employee representatives.
Volkswagen Boost 2030: strategic roadmap for a leaner future
Despite the progress, Schäfer cautions that Volkswagen still has “a considerable way to go.” The ongoing restructuring is part of the group’s broader strategy, known as Volkswagen Boost 2030, which outlines a long-term plan to streamline operations, strengthen competitiveness and stabilize profitability during a challenging phase for the automotive industry.
The program is designed to prepare the brand for rising cost pressure, intensifying competition—especially from Chinese EV makers—and the need to accelerate digitalization and electrification efforts.
No compulsory layoffs under the pact with IG Metall
A crucial element of the agreement with the union is the assurance that no compulsory layoffs will take place. All workforce reductions must be socially responsible and based on voluntary measures. This approach reflects longstanding labor traditions in Germany’s industrial sector, where negotiations between companies and works councils often prioritize employment security.
Under the current framework, staff reductions occur through:
- early retirement arrangements,
- partial retirement schemes,
- voluntary severance packages for younger employees willing to leave the company.
Volkswagen employs around 130,000 people across its German plants, making the agreed 25 percent reduction one of the most extensive transformations in its history.
A critical moment for the German auto industry
Volkswagen’s accelerated downsizing underscores the broader structural challenges faced by Germany’s automotive sector—rising production costs, slower-than-expected EV demand growth and increasing international competition. As the country’s largest industrial employer, VW’s decisions inevitably influence the economic landscape of entire regions, particularly Lower Saxony and Saxony, where several of the company’s factories are located.
Whether the Boost 2030 plan will succeed in restoring long-term competitiveness remains an open question. For now, Volkswagen is demonstrating a willingness to act faster and more decisively than in previous restructuring attempts.
