Volkswagen wants to freeze salaries until 2030 and cut costs

The Volkswagen Group is considering freezing the salaries of hundreds of thousands of employees worldwide until 2030, in an attempt to reduce costs and improve profitability. The measure could affect employees across several brands within the German group, including Volkswagen, Audi, Porsche, SEAT, CUPRA and Škoda.

The information was reported by the German newspaper Süddeutsche Zeitung, which had access to internal company documents. According to the publication, the salary freeze is part of a broader restructuring plan that also includes job cuts, reductions in benefits and changes to variable remuneration.

For now, Volkswagen has not officially confirmed the implementation of these measures and has described the reports as speculative.

Salary freeze could represent a 10% loss in purchasing power

According to the disclosed documents, the Volkswagen Group intends to keep the salaries of many of its employees unchanged until 2030, a decision that could have significant consequences for household income.

Although a salary freeze does not represent a direct pay cut, the absence of increases over several years means a loss of purchasing power, particularly in an inflationary environment.

According to calculations presented by Süddeutsche Zeitung, the employees affected could face a real loss of income of close to 10% by 2030.

The proposal could affect different brands, factories and regions where the group operates, as management intends to involve the entire corporate structure in the cost-cutting effort.

In addition to base salaries, possible cuts to variable remuneration, extraordinary payments and certain employee benefits are also under consideration.

The new guidelines could begin to be implemented during the final quarter of 2026, although the actual application of the measures will depend on decisions and negotiations that have yet to be concluded.

Volkswagen plans to eliminate up to 100,000 jobs

The possible salary freeze comes at a time when the German manufacturer is carrying out one of the largest restructurings in its recent history.

The Volkswagen Group has already announced plans to cut up to 100,000 jobs by 2030, seeking to adapt its structure to changes in the automotive market and reduce operating costs.

In December 2024, the company had announced an initial reduction of 50,000 jobs in Germany. In September 2026, plans were announced to eliminate a further 50,000 jobs, spread across German units and other European facilities.

The reorganisation could also involve reducing the complexity of the commercial range, with the possibility of significantly cutting the number of models available across the group’s different brands.

These decisions reflect a shift in Volkswagen’s strategy, as it seeks to make its operations more efficient and regain competitiveness in an increasingly demanding market.

Chinese competition increases pressure on Volkswagen

One of the main challenges facing the Volkswagen Group is the growth of Chinese car manufacturers, which have been gaining ground in the European market.

Chinese brands are offering increasingly competitive products, particularly in the electric car segment, combining advanced technology with sale prices that are often lower than those of traditional European manufacturers.

This competition places additional pressure on companies such as Volkswagen, which have invested significant amounts in the development of new platforms, electrification technologies and electric models.

At the same time, the group faces high production costs and the need to adapt its operations to a changing automotive market.

It is in this context that the restructuring plan for 2030 emerges, with measures aimed at reducing expenses, simplifying processes and ensuring the company’s financial sustainability.

Trade unions oppose possible salary cuts

The reports about the salary freeze have already triggered a negative reaction from employee representatives.

The German trade union IG Metall, one of the most influential in the automotive sector, strongly criticised the possibility of keeping salaries frozen for several years.

The organisation considers that the measure could lead to a significant loss of purchasing power and warned of the possibility of strong resistance from workers internationally.

The conflict comes at a particularly sensitive time for relations between Volkswagen Group management and its employees, due to successive announcements of cost reductions and job cuts.

Despite the reports published, there is still no official confirmation regarding which employees could be affected or the specific conditions under which the possible salary freeze would be implemented.

What about Volkswagen Autoeuropa in Portugal?

The possibility that these measures could affect the Volkswagen Autoeuropa factory in Palmela also raises questions about the future of the Portuguese plant.

According to information published by Jornal de Negócios, at the beginning of September 2026 there were still no concrete indications of redundancies at the Portuguese factory, although all group facilities were being analysed as part of the restructuring.

Autoeuropa may be in a more favourable position due to the investments made in modernising the facilities and preparing for new models, including projects associated with electrification.

However, there is still not enough information to guarantee that the Portuguese unit will be excluded from cost-cutting measures or possible changes to salary conditions.

Volkswagen’s plan demonstrates the challenges currently faced by European car manufacturers, between growing international competition, the transition to electric mobility and the need to control production costs.

For now, the salary freeze until 2030 remains a possibility reported by the German press rather than a decision officially confirmed by the group.

The upcoming negotiations between management and employee representatives will be crucial in determining the scope of the measures and their consequences for the future of one of the world’s largest car manufacturers.

Sources: Notícias ao Minuto, SAPO, Jornal de Negócios, CNN Portugal