Possible staff cuts: Volkswagen wants to reduce administrative costs by 20 percent

As the “Handelsblatt” reported in its Monday edition, Volkswagen AG’s personnel costs in the so-called indirect area are expected to fall by a fifth by 2026. The indirect area includes Volkswagen’s administrative apparatus, which employs around 40,000 office employees from both the VW brand and the group. Volkswagen is currently negotiating with the works council about billions in savings for the low-profit main brand VW. The first discussions were held in October. The company announced a performance program in June to trim profitability within three years. The volume brand is expected to increase the return to 6.5 percent by 2026 – in the past quarter it was 3.4 percent. Around ten billion euros are to be freed up for this through efficiency improvements and savings.

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Negotiations about the VW performance program are dragging on

The “Handelsblatt” also reported that negotiations in the Volkswagen Group about the performance program for the core VW brand could drag on until next year. Accordingly, all measures are already in place for 2024, but the plans for the following years have not yet been finalized. According to the report, the management around brand boss Thomas Schäfer assumes that the most important key points could be agreed with the works council by the end of November or beginning of December.

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