German auto giant Volkswagen is planning to eliminate 35,000 jobs in Germany by 2030 as part of an extensive cost-cutting strategy, according to a report published by local media outlet Bild on Tuesday. The decision comes amid mounting pressure from looming US tariffs that continue to strain the German automotive sector.
The job reduction will primarily impact Volkswagen’s German manufacturing plants and the company has pledged to carry out the layoffs in an “acceptable manner”. Over 20,000 employees have reportedly agreed to voluntary early retirement, as revealed in a works council meeting at Volkswagen’s Wolfsburg headquarters.
Severance package offer
To ease the transition, Volkswagen is preparing a severance package that could offer affected employees up to $400,000, depending on their years of service. However, the total severance payout remains undisclosed.
In addition to layoffs, the automaker will slash annual apprenticeships from 1,400 to 600 starting in 2026, aligning with broader efforts to cut labour costs by nearly €1.5 billion annually.
The workforce shake-up also includes a payment freeze for 1,30,000 employees, with plans for a 5% salary hike deferred into a company fund. This fund is expected to support flexible work models and long-term financial restructuring.
Despite the sweeping changes, Volkswagen has ruled out plant closures, a move seen as a concession to unions and regional governments. The cost-cutting measures are being viewed as essential to keeping production operations viable in Germany amid global economic pressures.