Volkswagen is set to reduce its workforce at the Zwickau electric car factory due to what the company cites as the “current market situation.” According to a company spokesperson, approximately 269 temporary contracts that are soon to expire will not be renewed, with potential adjustments to shift operations also on the horizon.
The affected positions primarily involve employees with fixed-term contracts, a segment that accounts for about 2,500 of the 10,700 workers at Volkswagen’s electric car plant in Zwickau. The precise course of action regarding these job cuts will be negotiated with employee representatives in the coming days. Currently, it remains uncertain whether more than the mentioned 269 employees will be affected, as the outcome hinges on the evolving order situation in the upcoming weeks and months.
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The Zwickau facility is responsible for producing several electric vehicle models, including the ID.4, the ID.5 coupe offshoot, the compact ID.3, the Cupra Born, and the Audi Q4 e-tron SUV and Sportback. Reports also indicate that the Volkswagen Group intends to permanently adjust shift schedules in response to market conditions. This move comes as Volkswagen has experienced a noticeable decline in electric car demand, a trend that had been highlighted in reports earlier this year.
Just two months ago, Manager Magazin reported that the order backlog at the Zwickau electric car plant had significantly decreased from nearly 300,000 cars at the start of the year to less than half that number in July. A Volkswagen Group dealer noted a general reluctance to purchase electric cars since January, irrespective of the brand. It was also suggested that if the situation did not improve promptly, production in Zwickau might transition from three-shift to two-shift operation.
Furthermore, in late June, Volkswagen temporarily reduced electric car production at its Emden plant. Even in Wolfsburg, where VW had established an additional production line for the ID.3 to accommodate overflow production from Zwickau, the production rate was reported to be in the “small double-digit” range in July. This demand challenge for Volkswagen’s electric models extends beyond Germany and appears to affect the European market as a whole.
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Additionally, over the past two years, Volkswagen has substantially expanded its electric vehicle production capacity, diverting production volumes away from Zwickau. Notably, the ID.4 for the U.S. market is now locally manufactured. However, uncertainties remain about whether the ID.3 will proceed with planned production in Wolfsburg starting in the fall.
