Volkswagen India Early‑Exit Scheme for 2,300 Plant Workers — Restructuring 2025
On 10 Dec 2025, Volkswagen India introduced a voluntary early‑exit/retirement scheme for 2,300 workers to align workforce with production and address market challenges.
Raja Awais Ali
12/10/20251 min read
Volkswagen India Early‑Exit Scheme for 2,300 Plant Workers — Restructuring 2025
On 10 December 2025, the Volkswagen Group announced a voluntary early‑exit/early‑retirement scheme for 2,300 workers at its two manufacturing plants in Maharashtra, India. This move comes as the plants have been operating below their installed capacity, prompting the company to align its workforce with current production needs.
Despite more than two decades in India, Volkswagen’s brands account for only about 2% of the Indian auto market. Adding to the challenges, the company is currently facing an import‑tax dispute of approximately $1.4 billion with Indian authorities, which Volkswagen has denied.
The early‑exit scheme is entirely voluntary and was introduced following consultations with worker unions. Employees opting in will receive 75 days’ pay for every year of service, or for each year until their normal retirement age, whichever is lower. Workers who sign up within 5–10 days may also be eligible for an additional bonus.
Through this restructuring, the group — operating locally under Škoda Auto Volkswagen India (SAVWIPL) since 2018 — aims to rationalize manpower, maintain competitive wages, and ensure operational efficiency at its production facilities. Volkswagen emphasizes that this measure is part of a broader strategy to strengthen its long-term commitment to India, with plans to continue investments and potentially partner with local entities for future growth.
For employees, the scheme offers a financial exit option, providing security amid uncertain market conditions. For Volkswagen, it provides flexibility to adapt to under‑utilized capacity, shifting demand, and regulatory pressures, allowing the company to streamline operations while staying positioned for long-term growth.
This development highlights the dual reality of Volkswagen’s operations in India: while the company continues to invest and expand its presence, it must also adjust workforce and operations to match market realities. The voluntary early‑exit scheme represents a practical approach to workforce management, balancing employee interests with business sustainability.