Volkswagen to cut 30,000 jobs in ‘compromise’ deal

Volkswagen and its labour unions have agreed to cut 30,000 jobs at the group’s core VW brand in exchange for a commitment to avoid forced redundancies in Germany until 2025, a compromise which leaves the carmaker’s profitability still lagging rivals.

The turnaround plan, announced yesterday, will lead to €3.7bn in annual savings by 2020 and lift the Volkswagen brand’s operating margin to 4% that year, from an expected 2% in 2016.

That target still remains below rival European carmakers such as Renault and Peugeot Citroen, which is targeting an operating margin of 6% in 2021.