Volkswagen mulls to cut worker anniversary bonuses amid pay dispute

Anniversary bonus payments to long-time Volkswagen employees are among the many pay perks company bosses want to slash as part of deep cuts at the German automaker, a VW spokeswoman confirmed to dpa on Saturday.

VW has threatened to close plants in Germany, while labour leaders have warned of mass layoffs of tens of thousands of workers in the country as the automaker contends with falling profits and stiff competition.

VW executives and trade union leaders are currently negotiating a collective bargaining deal for the company's workers in Germany. According to the union, VW has demanded 10% across-the-board wage cuts in the talks.

Management contends that the car manufacturer's competitiveness is at risk due to high costs at its German plants.

According to the VW Works Council, thousands of VW employees are set to soon receive anniversary bonuses, which management now wants to cut.

Under the current collective agreement, workers receive one-off bonuses of 1.45 times their monthly salary after 25 years of service and 2.90 times the monthly salary for 35 years of service.

Sources close to the works council said that nearly 6,000 employees at VW were approaching the relevant anniversaries as of March 2024. Some of them have already reached the mark and received the payments.

VW employs around 120,000 people in Germany, around half of whom work in the car brand's headquarters and main plants in Wolfsburg.

The VW brand operates a total of 10 plants across Germany.