Red pencil in administration
VW expands farewell program
April 15, 2024, 6:35 p.m
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The car manufacturer Volkswagen wants to save on personnel – especially in administration. For this purpose, targeted termination agreements and bonuses are offered for those who make quick decisions. In addition, partial retirement is being expanded.
Europe’s largest car manufacturer Volkswagen is expanding partial retirement as part of its savings program and is also offering targeted severance payments. The company announced in an internal communication to the workforce that the offer will now be extended to those born in 1967. The deadline for reporting will be extended for those born in 1965 and 1966. Younger employees are specifically offered severance pay. The aim is to reduce personnel costs in administration by 20 percent by 2026, said Human Resources Director Gunnar Kilian, according to the announcement.
The savings are part of the efficiency improvement program launched last year. The group had already agreed on key points with the works council in December. Redundancies for operational reasons were excluded. VW left it open how many jobs would ultimately be cut. It’s not about heads, it’s about costs, they said.
“We are currently seeing great interest in our attractively designed partial retirement,” said Human Resources Director Kilian. “With an average of 85 percent of their salary in the active and passive phase, we offer our colleagues the transition to a financially secure retirement. At the same time, partial retirement offers the company the opportunity to sustainably reduce staff in a socially acceptable way.”
In addition, the group’s board of directors decided to specifically offer termination agreements in exchange for severance pay in the administrative area. There is a special bonus for those who make quick decisions until the end of May. Unlike previous severance pay programs, the offer does not apply to everyone interested, but must be accepted by VW in each individual case. In addition, it only applies to administrative employees.
The program is expected to bring four billion euros in earnings improvement for the Volkswagen core brand as early as next year, and by 2026 this should rise to ten billion euros per year. According to previous information, only a fraction of this is due to personnel costs. There should be significantly greater savings in material and fixed costs.