The company is currently overinvested, with the capacity to produce significantly more vehicles than there is demand, leading to a planned permanent reduction of about 730,000 vehicles.

Volkswagen has reached a significant agreement with employee representatives to eliminate over 35,000 jobs by 2030, avoiding layoffs despite necessary capacity reductions.

Intensified negotiations this week, marked by night sessions, aimed for a resolution before Christmas, focusing on critical issues such as wage cuts and factory closures.

An official confirmation of the agreement is pending from Volkswagen's executive board and the IG Metall union, which is crucial for the implementation of the discussed plans.

The discussions come amid high operational costs in Germany, prompting the need for job guarantees as the company navigates these financial pressures.

Volkswagen is grappling with declining demand and increased competition, particularly from lower-priced Chinese manufacturers, while facing political pressure to avoid plant closures.

Despite these challenges, Volkswagen has no plans for plant closures at Zwickau or Emden, focusing instead on modernization and transformation of facilities.

Production at the Emden plant will continue to focus on electric models, aligning with the company's commitment to electric mobility.

However, the Osnabrück plant is set to cease production in late summer 2027, with future plans for the location still to be determined.

Analysts suggest that while the current job cuts may be a starting point, further reductions could be necessary to remain competitive in the evolving automotive market.

Unresolved issues remain regarding the execution of investment plans, as IG Metall seeks binding commitments from Volkswagen amidst a fluctuating global market.

As part of the ongoing restructuring, employees have seen a decline in bonuses due to lower orders, impacting their earnings and overall job security.