Volkswagen To Axe Jobs In Struggling VW Brand
Managers informed employees on Monday that Volkswagen's 10-billion-euro ($10.9-billion) cost-cutting initiative will include layoffs. This announcement was made alongside a warning from Volkswagen brand chief Thomas Schaefer, who stated that rising costs and decreased productivity were making Volkswagen's vehicles noncompetitive.
The German automaker is currently negotiating a cost-cutting scheme for its VW brand with its works council. This is the first step in a larger, group-wide effort to improve efficiency during the transition to electric vehicles.
"With many of our pre-existing structures, processes and high costs, we are no longer competitive as the Volkswagen brand," Schaefer conveyed during a staff meeting at the carmaker's Wolfsburg headquarters, reported Reuters.
The company had previously stated its intention to use the "demographic curve" to reduce its workforce, reiterating its commitment not to implement layoffs until 2029. During the meeting on Monday, Gunnar Kilian, a board member in charge of human resources, stated that achieving this goal would necessitate agreements on partial or early retirement.
Nonetheless, Kilian emphasised that the majority of the 10 billion euro savings target would be achieved through measures other than layoffs. He also stated that the full details of these measures would be finalised by the end of the year.
