Volkswagen Managers to Take 300-Million-Euro Pay Cut Amid Restructuring Efforts

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Volkswagen managers are set to take a combined 300-million-euro pay cut, a decision driven by the company's need to restructure and reduce costs. This significant pay cut is part of a broader effort to address financial challenges and improve the company's competitive position.

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The pay cuts will be implemented in several phases. Around 4,000 VW managers will see a 10% reduction in their pay in 2025 and 2026, primarily through the elimination of bonuses. This will be followed by smaller reductions in subsequent years, with an 8% cut in 2027, a 6% cut in 2028, and a 5% cut in 2029. By 2030, the total pay cuts are expected to amount to over 300 million euros.

These measures are part of a comprehensive cost-cutting strategy that includes job reductions, production cuts, and the potential closure of several plants. The company has reported its least-profitable quarter in years, which has bolstered management's case for pursuing such drastic measures. The union has opposed these cuts, leading to strikes and ongoing negotiations.

The decision to reduce manager pay is seen as a necessary step to maintain the company's competitiveness and secure jobs for the broader workforce. However, it has also sparked significant resistance from labor representatives, who argue that the cuts are unfair and disproportionately affect employees.