Berlin Faces Over 1,200 Job Losses as VW Subsidiary IAV Pivots to Software
15.06.2026 - 00:32:53 | boerse-global.de
The capital city is bearing the brunt of a major restructuring at IAV, the engineering services arm of Volkswagen. Of the roughly 5,000 employees based in Berlin, more than 1,200 will lose their positions, part of a global reduction of 1,400 jobs out of a total workforce of 8,000 by the end of 2025. The cuts also hit Volkswagen’s Wolfsburg headquarters, though on a smaller scale.
The announcement has triggered sharp political backlash. Berlin’s economics senator expressed deep concern, while industry insiders have revived speculation that Volkswagen might sell the subsidiary outright. IAV management defends the move as a response to the struggling automotive sector and a strategic pivot: the company intends to refocus on software development, jettisoning traditional engineering roles.
Opposition is crystallizing around IG Metall, the powerful industrial union. It is demanding a social plan and insisting that the existing collective agreement prohibits operational dismissals at IAV. Worker representatives are pressing management to find alternatives that preserve core competencies and avoid a hollowing out of expertise.
IAV’s cuts are not an isolated event. Major suppliers such as Bosch, Continental, and ZF have all recently reduced headcount. The broader Volkswagen Group, meanwhile, is preparing even deeper cuts. CEO Oliver Blume is expected to announce at the annual general meeting on June 18, 2026 that roughly 19,000 jobs in Germany will go by the end of 2026. By 2030, the automaker aims to reduce its workforce by as many as 35,000 employees, part of a multibillion-euro efficiency drive.
Management cites weak demand, sluggish electric-vehicle sales, and mounting competitive pressure from Chinese manufacturers as the forces behind the belt-tightening. The factory in Dresden, known as the Gläserne Manufaktur, is scheduled to close by the end of 2025, and from 2027 the Golf will be assembled in Mexico. Production costs at German plants must drop by more than 20 percent by the end of 2025 for the company to remain competitive, according to Volkswagen’s internal plans.
