On December 20th, Friday, Eastern Time, Germany's Manager Magazine reported that Volkswagen plans to cut over 0.01 million employees in the coming years to save costs, but the magazine did not disclose the source of the information.

Moreover, after three months of intense negotiations, Volkswagen reached an agreement with its union leaders on Friday to reduce auto production capacity without closing any factories. This agreement avoided further union strikes and alleviated the conflict between both parties to some extent.

According to a statement from the union council on Friday, Volkswagen committed to retaining 10 factories in Germany and extending its employment protection agreement until 2030. In exchange, workers agreed to forgo part of their bonuses, reduce the number of trainees to be made permanent, and cut production capacity in five factories by several hundred thousand units.

These measures were agreed upon after five rounds of negotiations and are far from the significant cost-cutting plan initially proposed by Volkswagen. Volkswagen's management initially planned to enhance competitiveness through layoffs, reducing monthly salaries, and closing three factories in Germany; however, this proposal encountered strong opposition from union leaders.

Ultimately, management persuaded the union to shift the production of the Golf hatchback from the Wolfsburg plant in Germany to lower-cost Mexico and reduce its capacity at the Zwickau electric vehicle plant.

Currently, Volkswagen is facing challenges from declining market share in China and slowing demand for electric vehicles in Europe and the USA. Analysts believe this agreement provides Volkswagen CEO Oliver Blume with an opportunity to reverse Volkswagen's downward trend.

On Friday during Regular Trading Hours, Volkswagen's ADR rose over 6.1% but then halved its gains.