Volkswagen has been planning to cut 35,000 jobs in Germany over a period of five years but has been seeking to avoid compulsory layoffs. As part of this strategy and trimming exercise, 20,000 workers have already voluntarily opted to have their contracts terminated early.
The company is in the process of restructuring its plant at Wolfsburg so that in two years time it focuses on producing only electric vehicles (EV). This may result in the plant following a four-day work week soon.
In December 2024, Volkswagen had entered into an agreement with workers’ unions to implement cost-cutting measures. As part of the plan, the production of Golf, the combustion engine is reportedly being shifted from Wolfsburg to Mexico with effect from 2027.
The employees have been assured that focusing on production of the electric Golf is in the best interest of the plant in the long run. The demand for the combustion engine version of car has anyway been falling. Globally, it has fallen from a million in 2015 to just about three lakh in 2024, as reported by Reuters.
News of Volkswagen considering closing some plants in Germany amid efforts to regain its competitive edge in Europe were out in December 2024 itself. At the time it was also reported that this could lead to thousands of workers being rendered jobless as these German plants employed about 1.2 lakh workers. Employees of Volkswagen and members of the IG Metall Union had walked out on 2 December, 2024 to protest against the massive job cuts.
