Volkswagen to freeze salaries until 2030: 660,000 employees could be affected

Volkswagen plans to freeze salaries for around 660,000 employees worldwide until 2030, according to a Reuters report citing the company’s Global Works Council. The proposed measure comes amid a wider restructuring effort at the German automotive group, although Volkswagen has not officially confirmed the reported plan.

The Global Works Council said it had received internal information about the executive board’s intentions. German newspaper Süddeutsche Zeitung first reported the proposal, citing internal documents.

Pay freeze plan faces resistance

Volkswagen declined to comment on what it described as speculation, according to Reuters. A company spokesperson said a new round of discussions later in the week would provide the forum for proposals concerning labour costs.

The reported plan has drawn criticism from employee representatives, who questioned its feasibility and signalled opposition.

The Global Works Council described management’s approach as “absurd” and said it expected strong resistance to implementation.

Germany’s trade union IG Metall also emphasised the role of collective negotiations in determining employee pay.

“At Volkswagen, pay development is decided at the negotiating table, not by decree from the executive boardroom,” an IG Metall spokesperson said, according to Reuters.

Report flags wider cuts to employee compensation

The reported salary freeze may form part of broader measures to reduce costs across Volkswagen’s global operations. According to Süddeutsche Zeitung, the proposed management guidelines would also cover variable pay, special payments, employee benefits and jobs.

The report said the new global guidelines were scheduled to take effect in the fourth quarter. The available information does not specify the number of jobs or employees that could be affected by the wider measures.

Key details emerging from the reports include:

• Duration: The proposed salary freeze would continue until 2030.

• Workforce: Approximately 660,000 employees worldwide could be covered.

• Potential income impact: Süddeutsche Zeitung estimated that the absence of pay rises could reduce affected employees’ income by around 10% through inflation.

• Additional measures: Reported proposals include reductions in variable pay, special payments and benefits, alongside job cuts.

• Status: Volkswagen has not confirmed the reported plan and has referred questions about proposals to upcoming labour-cost discussions.

The projected 10% income loss refers to the potential effect of inflation on purchasing power, rather than a confirmed reduction in nominal salaries.

Restructuring puts management and labour relations under pressure

The reported proposal comes as relations between Volkswagen and its labour representatives have deteriorated in recent months. Chief executive Oliver Blume is pursuing a major restructuring programme at the automotive group.

The discussions over labour costs form part of the broader effort to address the company’s business challenges. However, the available reporting does not establish whether the proposed salary freeze has been formally approved by management or agreed with employee representatives.

Negotiations will determine the next steps

The next round of labour-cost talks is expected to provide a forum for proposals and further discussion. Employee representatives have already signalled resistance, making negotiations central to the plan’s potential implementation.

Until Volkswagen provides formal confirmation, the reported salary freeze and associated compensation measures should be treated as proposals rather than final decisions. The eventual outcome will depend on the discussions between management and labour representatives.