Since 3 September 2026 it is official: the Volkswagen Supervisory Board has unanimously approved the Management Board's restructuring plan. According to the company, this means that for the Zwickau plant, no competitive subsequent utilisation can be guaranteed from 2031 onwards. Vehicle production in Zwickau and Emden is set to end in 2031, in Hanover in 2032 and in Neckarsulm in 2034. Tens of thousands of jobs are to be cut worldwide. By the end of June 2027, Volkswagen intends to clarify the specific future of the locations. The Works Council emphasises that a plant closure has not thereby been sealed. For the approximately 9,000 employees in Zwickau and an estimated up to 20,000 jobs at suppliers in Saxony, the uncertainty is nonetheless real.

I am Martin Reichelt, specialist solicitor for employment law in Dresden. Since the collective bargaining agreement of December 2024, I have regularly been receiving enquiries from VW employees and staff of supplier companies: Should I accept the severance offer? Can VW transfer me to Wolfsburg? What applies if I work for a supplier? In this article, I assess the current situation from an employment law perspective.

Employment security until 2030: What the collective wage agreement really protects

Following the collective wage agreement of December 2024, compulsory redundancies at Volkswagen are ruled out until the end of 2030. That is strong protection, but not complete protection. You should be aware of three caveats:

The protection only applies to the core workforce with VW in-house collective agreement. Agency workers, fixed-term employees and supplier workforces are not covered by this.
Protection ends before the end of production. If employment security expires at the end of 2030 and production in 2031, the year 2031 becomes the decisive point in time. What applies after that must be settled in new negotiations.
The protection does not prevent job losses. Volkswagen is reducing its workforce through phased retirement, severance agreements and redundancy programmes. By 2030, around 35,000 jobs are to be cut at German locations, without dismissals, but with considerable pressure on each individual.

Severance scheme and phased retirement: When signing is worthwhile

IG Metall in Zwickau criticises that the redundancy scheme is causing precisely the good people to leave voluntarily. From the employees' perspective, the question is simpler: Is the offer good for me personally? To determine this, I check four points.

The invoice: How does the severance payment compare to what you would reliably earn until the end of 2030? Anyone who still has a five-employment guarantee gives up a lot with a mutual termination agreement. The severance payment must reflect this sacrifice.
The closing time: A mutual termination agreement can lead to a twelve-week suspension period for unemployment benefit (§ 159 SGB III). The Employment Agency generally only waives this if a redundancy-related dismissal was genuinely imminent, the notice period is observed, and the severance payment is within the usual range. Given a collective agreement excluding dismissal until 2030, this particular point is tricky.
Phased retirement: The block model sounds tempting, but it has consequences for pension reductions, occupational pensions and the safeguarding of the credit balance. Anyone close to retirement should have the figures confirmed by the pension insurance scheme before signing.
The alternatives: What happens if you do not sign? Reassignment, dismissal with a variation of contract, or simply continued employment until 2030. Anyone who doesn't know that is negotiating badly. You can find my ground rules at Severance pay in labour law and Cancellation agreement.

Transfer to Wolfsburg? Management prerogative and variation of contract

The ID.3 is also scheduled to be built in Wolfsburg from 2027 onwards. This raises the question for many whether VW can transfer employees from Zwickau there. The answer depends on your employment contract. If it contains a transfer clause, the employer can fundamentally transfer you to another location within the scope of managerial authority (§ 106 GewO), but must exercise reasonable discretion in doing so. Family, commuting distance, length of service and the question of whether there are still employment opportunities in Zwickau play a role here. A distance of over 400 kilometres is not automatically unreasonable, but neither is it automatically permissible.

If a relocation clause is missing or if Zwickau is firmly agreed as the place of work, VW needs a Dismissal with offer of altered conditions of employment in accordance with Section 2 of the KSchG. You can accept under reserve and have it reviewed by a court within three weeks without risking their job. Whether a dismissal with offer of altered conditions of employment is even permissible during the period of collective bargaining job security depends on the wording of the collective agreement. Exactly this question will keep the labour courts in Saxony busy in the coming years.

VW Sachsen becomes part of Volkswagen AG: transfer of undertaking and your rights

According to media reports, Volkswagen Sachsen GmbH is to be incorporated into Volkswagen AG by 2027. Section 613a of the Civil Code (BGB) will then apply to employees: their employment relationship is transferred to the new employer with all rights and obligations, and length of service, salary and collective agreements remain in place. Dismissal on the grounds of the transfer is invalid. Employees must be informed in writing beforehand of the timing, reason and consequences. Although an objection to the transfer is possible in the case of a corporate merger, it is practically futile because the previous employer will no longer exist. I therefore advise examining the information letter carefully and securing commitments regarding location and collective bargaining agreement status in writing, rather than objecting on reflex.

Suppliers in Saxony: Different rules apply to you

Job security at VW does not help suppliers' employees. The normal Protection Against Dismissal Act applies to them, provided the establishment has more than ten employees and they have been employed for longer than six months. If an order falls through, the employer can dismiss employees on operational grounds, but must carry out a Social selection based on length of service, age, maintenance obligations and severe disability, and comply with the notice periods under Section 622 of the German Civil Code (BGB). With more than 20 employees, operational changes, a reconciliation of interests and a social plan under Sections 111 et seq. of the Works Constitution Act (BetrVG) also apply, and from certain thresholds, the collective redundancy notification under Section 17 of the Dismissal Protection Act (KSchG). Errors in this procedure render dismissals invalid. How a dismissal is reviewed is explained under Dismissal and protection against dismissal.

The deadline that decides everything: three weeks

Whether VW core workforce or supplier: against every dismissal, including a variation contract (dismissal with offer of altered conditions of employment), you must within three weeks after receipt File a claim with the employment tribunal (§ 4 KSchG). Afterwards, the dismissal is deemed effective. In practice, the claim is often the means to negotiate severance pay, gardening leave and a reference letter on an equal footing.

Checklist for employees in Zwickau and at suppliers

Read employment contract: Is there a relocation clause? Is Zwickau agreed as the place of work? Which collective agreement applies?
have quotes calculated, before you sign: severance pay, disqualification period, tax, pension, company pension scheme.
Ask for time to think. No reputable programme asks for a signature on the same day.
Save documents: Contracts, addenda, payslips, goal agreements, proof of special dismissal protection.
Request an interim reference, as long as the structures are in place. What needs to be in there: certificate of employment.
Keep track of deadlines: three weeks in the case of dismissal and dismissal with an offer of altered employment conditions, one month for objection in the event of a transfer of business.

My conclusion

For Zwickau, 2031 has been named as the end date, but nothing is definitively settled. Negotiations regarding subsequent occupancy, the social plan and the period after 2030 are only just beginning. Anyone who signs under pressure now often gives away precisely the protection that the collective bargaining agreement guarantees until 2030. Anyone who knows their rights can calmly decide whether a redundancy offer, a transfer or waiting it out is the better option. I represent employees from Zwickau, the Chemnitz region and the whole of Saxony vis-à-vis Volkswagen and suppliers, including before the labour courts in Zwickau and Chemnitz.

Call me for a no-obligation initial telephone assessment, including at short notice and via video: 0351/40436556 or kontakt@kanzlei-reichelt.de. Consultation also available in English. More about my work as Specialist lawyer for employment law in Dresden.

Note: This post provides general information and does not replace legal advice in individual cases. The information regarding the restructuring plan is based on Volkswagen's announcement regarding the Supervisory Board resolution of 3 September 2026 and public reporting; the specific future of the Zwickau site is to be clarified by the end of June 2027. As of 15 September 2026.