Volkswagen expands with Microsoft Copilot as salary freeze for 660,000 workers reportedly looms

# Volkswagen Deploys Microsoft Copilot to 330,000 Employees Amid Reported Salary Freeze Plan

Volkswagen Group has expanded its use of artificial intelligence by rolling out Microsoft Copilot to more than 330,000 employees, as the German automaker faces reports of a proposed salary freeze affecting approximately 660,000 workers worldwide through 2030.

Microsoft announced the AI rollout on Wednesday, describing it as part of Volkswagen’s gradual integration of artificial intelligence into everyday workplace activities. Separately, Reuters reported that Volkswagen was considering a salary freeze, citing the company’s Global Works Council. Volkswagen has not confirmed the proposal.

The developments come as the automaker seeks to broaden the use of AI across its operations while management and employee representatives continue to face discussions over labour costs and the company’s financial priorities.

Volkswagen initially introduced Copilot Chat, Microsoft’s AI-powered conversational service, to its workforce. According to Microsoft, the tool has since attracted more than 300,000 monthly active users at the automaker.

The company has now expanded its AI capabilities through Work IQ, which supports more advanced tasks and enables deeper integration of artificial intelligence into business processes.

Employees across multiple departments, including engineering, production, procurement and sales, are using the tools to support their work. Volkswagen Group also had more than 26,000 AI agents active during the month preceding the announcement, highlighting the growing role of automated systems within the organization.

Sophie Vassarotti, Volkswagen’s head of group data and AI, said the objective is to provide employees with secure AI assistance at scale, enabling them to work more efficiently and make better-informed decisions.

Agnes Heftberger, chair of the management board of Microsoft Germany, said the rollout brings AI into employees’ daily routines and could help them concentrate on higher-value responsibilities.

While the technology expansion signals Volkswagen’s growing investment in workplace AI, the reported salary freeze has drawn attention to the financial pressures facing employees. Reuters, citing the automaker’s Global Works Council, reported that the proposed measure could apply to around 660,000 workers worldwide through 2030.

German newspaper Süddeutsche Zeitung first reported the proposal, which could reportedly extend beyond base salaries to include bonuses, special payments, employee benefits and jobs.

The newspaper estimated that a prolonged absence of pay increases could reduce employees’ purchasing power by approximately 10% over the period as inflation erodes the value of their earnings.

Volkswagen has not confirmed the reported plan. A company spokesperson described the reports as speculation, according to Reuters, leaving uncertainty over whether the proposal will proceed and what measures it might ultimately include.

The parallel developments highlight two different aspects of Volkswagen’s current workplace strategy: the adoption of AI to improve productivity and the ongoing debate over labour costs. Microsoft has presented Copilot as a tool to help employees work more effectively across business functions, but the broader financial consequences of its adoption remain unclear.

It is not yet known whether the expanded use of AI will directly affect Volkswagen’s labour expenses, staffing levels or future employment decisions. The relationship between workplace automation and compensation policies will depend on how the company implements the technology and the outcome of discussions with employee representatives.

As Volkswagen continues integrating AI into its operations, employees and industry observers will be watching both the practical benefits of the technology and the outcome of the reported salary negotiations. The company’s next steps could offer further insight into how major manufacturers balance digital transformation with workforce costs and employee interests.