Thursday, February 22, 2024
News Volkswagen Planning $10.9B in Cuts as Brand "No Longer Competitive"

Volkswagen Planning $10.9B in Cuts as Brand “No Longer Competitive”

VW slashing jobs

  • VW planning to reduce staffing, but other cuts coming

  • Big cuts needed to maintain brand through EV transition

Volkswagen is planning $10.9 billion in cuts, according to a new report. The automaker is planning massive changes as the company says the brand is no longer competitive in the market.

Per Automotive News Europe, VW is in the middle of negotiations with its works council over slashing headcount and cutting labour costs. It’s just the first step, though, in VW’s drive to boost efficiency and cut costs as it attempts to transition to electric vehicles.

“With many of our pre-existing structures, processes and high costs, we are no longer competitive as the Volkswagen brand,” brand boss Thomas Schaefer is said to have said to staff.

While Volkswagen had planned to take advantage of expected retirements to cut staffing and had said it would not do layoffs until 2029, that plan has changed.

According to the report, HR board member Gunnar Kilian said in a meeting that the headcount reduction would come through partial and early retirement agreements. But he said that the bulk of the $11b savings goal would not come from staff reduction. “We need to finally be brave and honest enough to throw things overboard that are being duplicated within the company or are simply ballast we do not need for good results,” Kilian said.

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