Only days off left

Austerity measures: VW cuts extra pay for employees

The VW Group is pursuing a massive cost-cutting course.

(Bild: AP)

Due to cost-cutting measures, Volkswagen is removing the option for employees to choose between days off and a wage supplement. A spokeswoman confirmed on Monday that this year and in the following two years, employees will no longer be able to have their additional pay paid out. Instead, all tariff employees will receive six additional days off.

This had been agreed with IG Metall as part of the efficiency improvement program for the core VW brand announced last year. Business Insider had previously reported.

New rule applies for the next threeyears
According to the Works Council, around half of the VW workforce has already opted for days off and waived the additional pay. This is now mandatory for three years. The option to choose flexibly between a bonus and days off was created for all employees at VW in the 2022 collective agreement. Previously, this had only applied to certain employees.

(Bild: Volkswagen AG)

Works Council: "This is a step backwards"
Head of the Works Council Daniela Cavallo regretted the restriction. "This is a step backwards," she said in a special edition of the works council magazine "Mitbestimmen". "But we think this is a viable option." This could avoid cuts in pay.

In December, VW reached an agreement with the Works Council on the key points of an efficiency improvement program. Personnel costs are to be reduced by 20 percent in the administrative area. There are to be no compulsory redundancies.