Volkswagen to Cut Jobs As Part of $11 Billion Cost Saving Effort
Volkswagen needs to cut costs and to get there, the automaker is cutting jobs. Company CEO Thomas Schaefer said that VW’s growing costs and waning productivity have necessitated the cuts, which will take place over the next several years.
VW is looking to save almost $11 billion and create a more efficient operational structure as it transitions to full electrification. The company has said that it would rely on a “demographic curve” to tighten its workforce, which just meant it would wait for people to retire while slowing hiring instead of conducting mass layoffs.
The workforce reduction will involve partial and early retirement agreements with employees, though VW said it would not actually dismiss anyone until at least 2029. It’s unclear how many people will be impacted by the cuts or how long the process will take, but Volkswagen was clear that the workforce reduction is not the only avenue it plans to take to save money. The company said that most of the cost cuts will come from other efforts, which the automaker will define by the end of the year.
Whatever the outcome, the company clearly feels it’s grown too bloated to continue growing without a diet. One of VW’s HR executives said, “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.”
[Image: hydebrink via Shutterstock]
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Chris grew up in, under, and around cars, but took the long way around to becoming an automotive writer. After a career in technology consulting and a trip through business school, Chris began writing about the automotive industry as a way to reconnect with his passion and get behind the wheel of a new car every week. He focuses on taking complex industry stories and making them digestible by any reader. Just don’t expect him to stay away from high-mileage Porsches.
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This just feels like Detroit in the 70s and 80s. VW has failed to invest in their core engineering/manufacturing for years while focusing on flashier, more profitable, premium features and products.
After Deiselgate that the years of neglect is catching up with them. However, instead of looking hard at their past failures and slowly fix their underlying issues, they've thrown their money into BEVs and VW.OS hoping for a quick turnaround.
Now that the instantaneous rebound has failed to materialize, they're cutting their way to profitability. Things will only get worse.
VW, where is your wunderwaffe? Tesla will surpass VW by 2030.
Between the mid-late 90's up till around 2010 VW had a cool 'alt' thing going for it- even after the disastrous MK.4 generation, the MKV's still felt like a million bucks and overbuilt. They were popular daddy's money cars with sorority girls and just-hired-at-apple college grads, and basically offered euro car feel at a more pragmatic price point. Hell the GTI was cool across a 6 decade age gap as my first boss drove one as his daily with a 911 in the garage.
But post 'American Passat' and later Dieselgate, VW's basically got nothing aside from cash on the hood when the credit isn't good enough for a Highlander and the wait list is too long for a Telluride. What's the point of buying a VW if it's going to drive no better than your garden variety Subaru or Hyundai, but still fall victim to gremlins from overly complex electronic systems? Who wants to pay $1k for a new window switch because it requires coding from the ECU on a generic crossover?
Worse, VW's moonshots have been complete failures. The ID.4 isn't anyone's first choice of EV. Or second. Or third. Electrify America is so bad Tesla's winning the standard war. CARAID has done nothing. The new electronics systems with their hideous touch controls literally screwed up the last thing VW was doing right. The ID Buzz looks cool but is a sub-300 mile range van really what the category is asking for? Scout has potential but watch them blow it all by trying to go in on 'premium' where they'll be eaten alive by Rivian in the $$$ EV category and Toyota everywhere else. And that's before we get to their other brands, which are doing okay I guess but Audi's EV products are obsolete, their ICE products aren't on anyones radar, and even stuff they bought out like Silvercar seem to be money wasted.
VW is notorious for electrical gremlins and they are now going all in on EV's. I'll pass.