Volkswagen Plans Global Wage Freeze for 660,000 Employees Until 2030
Volkswagen Group is planning a global wage freeze for up to 660,000 employees until 2030 and potential cuts of 100,000 jobs amid declining sales and fierce Chinese competition.
Volkswagen Group is advancing an unprecedented measure: freezing the wages of up to 660,000 employees worldwide until 2030. The management of the group, which includes Volkswagen, Audi, Porsche, Škoda, and Cupra, is seeking to halt wage increases as part of a broad restructuring plan aimed at tackling declining sales, fierce Chinese competition, and low profitability. Simultaneously, the company is pushing forward with workforce reductions that could reach approximately 100,000 jobs by the end of the decade.
According to internal documents whose details were revealed in Germany, management has instructed human resources managers worldwide to prepare for wage freezes through 2030. The plan also includes reviewing reductions in bonuses, special payments, and additional employee benefits. The employee representative council confirmed the existence of the directive, stating it took effect at the beginning of October. Volkswagen, for its part, avoided publicly confirming the plan, clarifying that these issues will be discussed during negotiations with the labor unions.
The implications for employees could be significant. Even when nominal wages remain constant, the rising costs of food, energy, housing, and services erode purchasing power. Assuming an average annual inflation rate of 2.5%, four years of wage freezes will reduce real value by approximately 9%. An employee earning 4,000 euros per month will continue to receive the same amount, but their purchasing power will be equivalent to roughly 3,620 euros in today's prices.
The German metalworkers' union, which represents a large portion of the group's employees, is instead demanding a 5% wage increase. Employee representatives argue that they have already agreed to significant concessions in recent years and that managing the crisis through additional wage cuts could exacerbate the lack of trust between employees and management.
At the end of September, Volkswagen announced the cancellation of several collective bargaining agreements valid from the end of December 2026, to allow for negotiations on new terms. The agreement protecting employment until the end of 2030 remains in force. The union is already preparing for the possibility of labor actions starting in January 2027.
Financial data, however, explains management's stance. In the first half of 2026, Volkswagen's revenue totaled 158.1 billion euros, almost unchanged from the previous year. Operating profit dropped by about 11.6% to 5.9 billion euros, and the operating margin stood at 3.8%. For a group generating hundreds of billions in revenue, this is a relatively low profitability rate given the scale of operations and investment needs.
Weakness is also reflected in sales. In the first nine months of the year, the group delivered approximately 6.01 million vehicles, a 9% decline compared to the same period. The situation in China is particularly difficult: deliveries in the Chinese market plummeted by 30%, while Western Europe saw an increase of about 1%.
Management aims to achieve a 9% operating margin by 2030, an ambitious target relative to current performance. To achieve this, it plans to reduce model variety, lower production costs, and simplify the organizational structure. The wage freeze is supposed to integrate into this process, but actual savings depend on agreements with labor representatives in various countries.
