Volkswagen is reportedly considering a global salary freeze until 2030 that could affect around 660,000 employees. The German automotive group is looking to reduce labour costs amid a broader restructuring. The proposal has drawn opposition from employee representatives, according to a Reuters report citing the company’s Global Works Council.
The council said it had received internal information about the executive board’s plans. German newspaper Süddeutsche Zeitung first reported the proposal, citing internal documents.
Volkswagen has not officially confirmed the reported salary freeze and declined to comment on what it described as speculation.
A Volkswagen spokesperson said upcoming discussions would provide a forum for proposals relating to labour costs. The reported plan has prompted criticism from employee representatives, who have questioned its feasibility and signalled resistance to its implementation.
Germany’s trade union IG Metall has also stressed that employee pay must be determined through collective bargaining. The proposed freeze is expected to feature in wider discussions between management and labour representatives.
The proposed global guidelines could reportedly extend beyond fixed salaries to include variable pay, special payments, employee benefits and jobs. The measures were scheduled to take effect in the fourth quarter, although details of their implementation remain unclear.
The report estimated that the absence of salary increases could reduce affected employees’ purchasing power by around 10 per cent through inflation. This would represent an erosion of real income rather than a direct reduction in nominal salaries.
The proposal comes as Volkswagen chief executive Oliver Blume pursues a wider restructuring programme aimed at addressing the company’s business challenges and reducing costs across its operations. However, the available reports do not establish whether the salary freeze has been formally approved or agreed with employee representatives.
The next round of labour-cost discussions is expected to provide an opportunity for management to present its proposals. Employee representatives have already indicated opposition, making negotiations central to any potential agreement.
Until Volkswagen formally confirms the plan, the reported salary freeze and other compensation measures remain proposals rather than final decisions.
