Volkswagen AG managers are facing hefty pay reductions in the coming years as part of an agreement with labor to make Europe’s biggest automaker more competitive.

Volkswagen on Friday announced sweeping changes to its German operations, including more than 35,000 future job cuts and sharp capacity reductions in a last-gasp deal between Europe's top carmaker and unions to avert mass strikes.

Volkswagen announced sweeping changes to its German operations, including more than 35,000 future job cuts and capacity reductions in a last gasp deal between Europe’s top carmaker and unions on Friday to avert mass strikes.

VW Group threatened to close up to three plants in Germany, but a deal with workers means those plants are safe.

VW and labor unions agreed on job cuts, capacity reductions, and production shifts to maintain German factories while tackling declining demand for electric vehicles.

Volkswagen shares were down 3% in early trade on Monday with analysts citing uncertainty about the automaker's cost-cutting deal with unions and likely headwinds in 2025. Friday's agreement, hailed by unions as a "Christmas miracle",

It outlines a major cost-cutting plan that includes 35,000 job cuts in Germany and the closure of multiple factories. Volkswagen aims to reduce domestic production capacity by 734,000 vehicles annually,

After extensive negotiations, the German labor union IG Metall and the management of Volkswagen have reached an agreement. VW has decided not to close German factories, but it will significantly reduce its workforce.