Volkswagen is reportedly considering a global salary freeze until 2030 as part of its efforts to reduce labour costs and restructure its operations. The proposal could affect approximately 660,000 employees, although the company has not officially confirmed the plan.
According to Reuters, citing information from Volkswagen’s Global Works Council, employee representatives had received internal information about the executive board’s reported proposal. German newspaper Süddeutsche Zeitung first reported the plan, citing internal documents.
Volkswagen declined to comment on the reported salary freeze, describing the matter as speculation. A company spokesperson said upcoming discussions would provide an opportunity to consider proposals relating to labour costs.
The reported proposal has drawn opposition from employee representatives. Germany’s trade union IG Metall has emphasised that wages should be determined through collective bargaining, signalling that any changes to employee compensation could become a key issue in negotiations between management and labour representatives.
According to the reports, the proposed measures could extend beyond fixed salaries to include variable compensation, special payments, employee benefits and employment levels. However, the precise scope of the proposal and the arrangements for its implementation remain unclear.
A prolonged salary freeze could also affect employees’ purchasing power. If nominal salaries remain unchanged while consumer prices rise, employees’ inflation-adjusted incomes would decline. The extent of any impact would depend on inflation over the period and the compensation arrangements ultimately agreed upon.
The reported plan comes as Volkswagen Chief Executive Oliver Blume pursues a broader restructuring programme aimed at addressing business challenges and reducing costs. The company is reviewing its cost structure as it navigates changes in the automotive industry and ongoing financial pressures.
The next round of discussions between management and employee representatives is expected to address labour costs and related proposals. Given the opposition expressed by workforce representatives, negotiations are likely to be central to determining whether any salary-related measures proceed.
Until Volkswagen provides formal confirmation, the reported salary freeze remains a proposal rather than an approved company-wide policy.
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