Over the next four years, Volkswagen will shed 30,000 jobs as car production moves more towards mechanisation. Attempts to maintain profitability in the wake of the diesel emissions scandal are also behind the cull. The controversy has already seen the company fined $14.7 billion.
The news was revealed at a press conference at the firm’s main headquarters in Wolfsburg, Germany.
Come after lengthy discussions with its labour unions, Volkswagen believes the reduction in workforce should generate a $3.9 billion saving each year.
The cuts will affect the German based operations primarily, seeing 23,000 jobs trimmed in the firm’s home country. Across the globe, the VW group employs 600,000 staff, double the amount of their nearest rival, Toyota. This makes it one of the largest employers in the world.
At the press conference, VW’s brand executive, Herbert Diess, announced: “The pact for Volkwagen is a big step forward, certainly one of the largest in the group’s history.”
In a pre-released statement, the board of VW added that the company was currently losing money in a number of areas.
“Volkswagen needs to earn money quickly and be on the edge in the future,” they added.
By losing 5% of its total workforce, VW believes it will better their current operating margins, freeing up resources to invest in its electric and autonomous car programs.
The company’s CEO Matthias Muller was quick to point out that there would be no forced redundancies; instead the firm would let natural attrition run its course. Already, VW has announced the creation of 9,000 new jobs that concentrate specifically on electric car technology.
The new jobs are likely to be in Germany, meeting a stipulation demanded by the unions when they agreed to the planned job cuts. Another part of the overhaul will see, VW bosses building an electric sport utility in Wolfsburg, plus a smaller electric car, known as the I.D., a company source told Reuters.
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