German automaker Volkswagen’s plans to cut costs will be enacted on a larger scale than previously thought. This includes pay cuts, layoffs, and the closure of three factories.
Volkswagen previously made the headlines after reports that the company intends to shut down at least one of its plants in Germany, which would be the first time in history, while also ending the job security program that has been in place for more than three decades. The moves were prompted by the company’s struggles to maintain sales and break into the electric vehicle sector.
Now, according to Volkswagen’s works council, the automaker intends to turn to more drastic measures.
“The board wants to close at least three factories in Germany,” Daniela Cavallo, the head of the works council, shared.
Besides the closures, Volkswagen intends to downsize all the remaining plants in Germany. On top of that, the company plans to reduce salaries by 10% across all divisions and freeze wages in the next two years. Layoffs are also expected and could result in tens of thousands of employees being cut.
Volkswagen issued an official statement, saying that the negotiations with workers about future plans have been ongoing since 2023. The company stated that current economic conditions are forcing a massive restructuring, deeming it the only way they can turn to future investments and regain its footing in the industry.