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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