The rumor had been circulating for several weeks. Volkswagen just announced this Wednesday that it will have to cut jobs in the coming years to reduce its costs and improve its profitability within the framework of its laborious transition towards electromobility.
“In the coming years, we will need to reduce our workforce in a socially responsible manner, making the most of partial retirement and early retirement plans,” Chief Human Resources Officer Gunnar Kilian said in a statement following a staff meeting. . meeting at the Volkswagen headquarters in Wolfsburg.
Reduce salary costs by 20%
The objective is to reduce salary costs excluding productive activities by 20%, he added.
“We are not talking about 20% fewer staff,” said Gunnar Kilian, without quantifying the number of future job cuts.
“It is clear that in the future we will have to work with fewer staff in many areas of Volkswagen,” added Thomas Schäfer, CEO of the Volkswagen brand of the same name.
The latter is also the one that has the most difficulties and will be the most affected by the next reorganization. Talks between management and staff representatives are in their “final phase,” the press release states.
10 billion savings transformation plan
In search of profitability, Volkswagen announced in June a transformation plan aimed at achieving 10 billion savings and an operating margin of between 9 and 11% by 2030. The manufacturer is under pressure from competition from American brands Tesla and China, which are devouring its market share, especially in China, its main market where it generates 40% of its sales. In recent months, Thomas Schäfer has made numerous alarming statements about the state of his brand.
“The situation is very critical. Many markets are under pressure, our orders, especially for electric cars, are lower than our expectations,” he said in November.
“With our existing structures and our high costs, we are no longer competitive,” he added, calling on unions to accept “personnel” measures that will apply from next year.
The group also wants to reduce production times and costs, in particular by using platforms common to several electric models.
The improved performance comes against an economic backdrop complicated by inflation, rising interest rates, a bleak economy in China, and component supply issues since the pandemic. This fall, Volkswagen reduced production at several sites due to falling demand. The group has also decided to forego the construction of an additional factory in Wolfsburg, its headquarters and historical birthplace, where Golfs are especially manufactured.
Source: BFM TV
