Volkswagen plans to freeze the salaries of many of its employees worldwide until 2030. The measure is part of a new course to reduce costs and is described in internal documents for the group's international management, reports “Reuters“, citing information from the German business daily “Süddeutsche Zeitung“.
The documents related to the “Group Target Picture“ strategy state “Pay freeze until 2030“ - suspension of salary increases until the end of the decade. The new guidelines for international wage negotiations are to be implemented from the fourth quarter of 2026.
The measure will not be the same everywhere
The plan does not necessarily mean a complete zero year in every Volkswagen division. Internal rules stipulate that differences between individual brands, regions and companies will be taken into account. However, all units must make an “appropriate contribution“ to the savings targets.
In addition to the suspension of increases, variable remuneration, special payments and other benefits are planned to be reduced. Staff reductions, especially in activities outside production, are also indicated as part of the strategy.
According to data cited by “Süddeutsche Zeitung“, the refusal of wage increases could lead to a real loss of income of around 10 percent due to inflation. Potentially affected are a large part of Volkswagen's approximately 600,000 employees worldwide, including around 275,000 people in Germany.
A new stage in the crisis of the German automaker
The plan to freeze wages comes against the backdrop of a large-scale restructuring. Volkswagen's supervisory board approved an additional 50,000 job cuts worldwide in early September. This is in addition to the already agreed reduction in employment by the end of the decade.
The future of four German plants also remains uncertain. Among the sites under discussion are the plants in Hanover, Emden and Zwickau, as well as Audi's plant in Neckarsulm. Specific decisions for them have not been confirmed.
Volkswagen did not confirm the content of the internal documents. The company said it did not comment on “such speculation“ and added: “The upcoming round of negotiations is where internal arrangements need to be discussed first.“
The final scope of the wage freeze will therefore depend on the upcoming negotiations on individual companies and labor agreements. So far, it has only been confirmed that management has made limiting labor costs a key element of the restructuring plan until 2030.