Business
Volkswagen eyes pay cuts to achieve majority of savings, reports Handelsblatt
Published by Jessica Weisman-Pitts
Posted on October 29, 2024
2 min readLast updated: January 29, 2026
Global Banking & Finance Review®
Company
Published by Jessica Weisman-Pitts
Posted on October 29, 2024
2 min readLast updated: January 29, 2026
BERLIN (Reuters) -Volkswagen wants to achieve the majority of its billion-euro savings drive through pay cuts, Handelsblatt reported on Tuesday, citing a management board document.
BERLIN (Reuters) -Volkswagen wants to achieve the majority of its billion-euro savings drive through pay cuts, Handelsblatt reported on Tuesday, citing a management board document.
A proposed 10% cut to salaries at the core brand alone would bring in almost 800 million euros ($864 million) annually, Handelsblatt cited the document as saying.
In addition to the cancellation of various bonus payments, allowances and pay rises, savings would add up to around 2 billion euros per year total, which is about half of the targeted savings of 4 billion euros, it reported.
Volkswagen did not immediately respond to requests for comment from Reuters.
Volkswagen’s works council head said on Monday that the carmaker plans to shut at least three factories in Germany, lay off tens of thousands of staff and shrink its remaining plants in Europe’s biggest economy as it plots a deeper-than-expected overhaul.
Closing and selling off plants would bring significantly less in savings, Handelsblatt reported.
Volkswagen wants to adjust capacities but avoid closing sites if possible, with the aim being to find new owners for affected plants if necessary, according to the document.
The list of suggestions for savings also includes measures that affect component production and technical development.
However, the document does not contain any information on the total possible number of jobs at risk, said Handelslblatt.
($1 = 0.9261 euros)
(Writing by Miranda Murray, Editing by Friederike Heine and David Evans)
A pay cut refers to a reduction in an employee's salary or wages, often implemented by employers to reduce costs or improve financial stability.
A works council is a representative body of employees in a company that works with management to discuss workplace issues, including pay and working conditions.
A factory closure occurs when a manufacturing facility is permanently shut down, often resulting in job losses and financial implications for the company and employees.
Bonus payments are additional compensation given to employees on top of their regular salary, often based on performance or company profits.
A savings drive is an initiative undertaken by a company or organization to reduce expenses and increase financial efficiency, often through cost-cutting measures.
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