Volkswagen Brand Faces Job Cuts as Competitors Surge Ahead
Volkswagen Brand Faces Job Cuts as Competitors Surge Ahead
Will Volkswagen’s cost-cutting measures and focus on electric vehicles be enough to close the gap with its competitors?
Volkswagen brand chief Thomas Schäfer has admitted that the company is losing ground to its rivals, leading to planned job cuts within the organization. While Volkswagen has previously announced its intention to reduce its workforce, it is now considering early retirement options for certain employees. Despite these challenges, the company remains committed to its aggressive rollout of electric vehicles. Let’s delve into the details.
While addressing the staff, Volkswagen brand chief Thomas Schäfer conceded that the company is no longer competitive as a brand due to its existing structures, processes, and high costs. This admission has prompted the company to embark on a €10 billion savings program. The program is currently being negotiated with the works council, and it is expected to include job cuts.
The company had previously stated its intention to take advantage of the ‘demographic curve’ and reduce its workforce gradually until 2029. However, it is now looking at offering partial or early retirement to certain employees. The exact number of workers affected by these retirement options has not been specified.
Gunnar Kilian, a member of Volkswagen’s human resources board, emphasized that the majority of the €10 billion savings program will be achieved through other measures, rather than job cuts. He stressed the importance of eliminating duplication within the company and getting rid of unnecessary elements that hinder positive results. More details regarding the savings program will be revealed later this year.
While Volkswagen faces challenges in its electric vehicle rollout, experiencing production pauses and considering job cuts at specific plants, the company is also looking to the future. It is developing new platforms, such as MEB Entry for entry-level EVs in Europe and A Small Architecture for more affordable EVs in China.
Despite the obstacles, Volkswagen aims to double its profitability to 6.5% by 2026. The company has already started making cuts to simplify its operations, discontinuing the lower-volume Arteon and reducing the number of configurations for its remaining vehicles. It also plans to align production more closely with its subsidiary brands Seat, Cupra, and Skoda.
- Volkswagen brand chief acknowledges falling behind competitors
- Company plans €10 billion savings program
- Job cuts will include staff reductions
- Early retirement options being considered
- Focus on reducing duplication within the company
As Volkswagen faces the need for cost cuts and workforce reductions, it remains committed to its vision of becoming a leader in the electric vehicle market. By streamlining its operations, embracing new platforms, and aligning production with its subsidiary brands, the company hopes to regain its competitive edge.
