Volkswagen Group has reached an agreement with employee representatives on cost-saving measures impacting management salaries. The annual bonuses, traditionally distributed in May, will significantly decrease, leading to a 10% reduction in the annual income of approximately 4,000 managers for 2025 and 2026. Further reductions of 8%, 6%, and 5% are planned over the next three years, concluding by 2030.
The agreement, which is part of a labor contract, is finalized but awaits official comment from Volkswagen. The company recently announced that management will contribute "disproportionately" to cost reductions. The board members, whose annual income is around 45 million euros, are expected to take even larger pay cuts, with calls for a reduction of over 10%.
Volkswagen also plans to cut 35,000 jobs and reduce production capacity by 25%. Around 140,000 employees in Germany will forego pay raises and bonuses, reducing annual labor costs by 1.5 billion euros. Factory investments in Germany are planned as part of the agreement.
