Volkswagen Mulls Cut In Wages, Bonuses To Save 4 Billion Euros: Report

Volkswagen is reportedly weighing cost-cutting measures, including a 10% wage cut, a two-year wage freeze, and bonus restrictions for its top executives as part of its plans to save 4 billion euros.

The carmaker faces mounting pressure to reduce expenses amid a challenging economic climate.

Workers have slammed management for allegedly failing to provide a clear future strategy, despite assurances that a new plan was being developed.

The company's leadership has already discussed a number of possible cost-saving measures, including putting a limit on the bonuses of the top-tier employees and cutting additional payments for anniversaries of employees.

It is also contemplating closing a number of production sites in Germany, Reuters reported, citing Handelsblatt newspaper on Sunday.

Negotiations with the company's union are still ongoing, although the results of the discussions have not yet been made public.

The conditions within the company have been intense due to talks of potential factory closures, which were revealed earlier in September. The announcement was met with a strong opposition from the IG Metall union, which represents over 2.2 million employees from the areas of metals and electricals, iron and steel, textiles and clothing, wood and plastics, crafts and services, and information and communication technology.

Reuters reported that the union must be able to negotiate new labor deals for more than 130,000 Volkswagen workers in Germany after the group ended agreements earlier in September. The agreements protected employment at six plants since the mid-90s in western Germany.

The company says high labor costs in Germany have put the carmaker in a disadvantageous position compared to its peers in Europe and in China.

The automaker has been holding weekly meetings with union representatives from German plants.