Volkswagen moves against executives in cost cutting measures

 

BAVARIA – German carmaker Volkswagen has changed its annual paid leave policy for managers to bring it into line with other employees amid company-wide cost-cutting efforts.

Previously, the rule was that managers did not have to take their vacation days in the same year and they could save up the unused time indefinitely.

This will come to an end in 2024, a VW spokeswoman said in response to a dpa enquiry.

According to the new rules that also apply to the top executives, annual leave must now be taken within the calendar year.

If for some reason the managers were unable to use their holidays, the unused time can be carried forward only until March 31 of the following year – a policy that lower-level employees covered by collective bargaining agreements have long had to abide by.

“The new regulation for management is in harmony with the holiday regulations in the collective bargaining sector,” the spokeswoman said.

The change also helps to standardize operations in Volkswagen’s personnel department.

Der Spiegel, which first reported on the change, said some managers had accumulated holiday entitlements of several months on the basis of the previous regulation, which complicated long-term budget planning.

Europe’s largest car manufacturer is currently working on a cost-cutting programme worth billions.

Chief executive Oliver Blume set new earnings targets for all of the group’s brands in the summer, which are to be achieved through savings and additional revenue opportunities. Staff cuts are also being considered at Volkswagen.