How will Volkswagen save $3.9b? By firing 30,000 workers globally
frankfurt — Volkswagen reached a landmark agreement with workers to cut as many as 30,000 jobs globally and save €3.7 billion ($3.9 billion) in expenses as the company tries to claw back from the emissions-cheating scandal and invest in electric vehicles.
Reducing headcount by nearly five per cent will come through attrition as the automaker agreed to refrain from forced layoffs until 2025, the Wolfsburg, Germanybased company said on Friday. After months of intense talks, labour and management agreed on a
All manufacturers must rebuild themselves because of the imminent changes for the industry. We need to brace for the storm Herbert Diess, Volkswagen brand chief
package to balance cost-cutting with investment as the auto industry shifts away from traditional combustion engines and adapts to car-sharing services and self-driving technologies.
“This is a big step forward, maybe the biggest in the company’s history,” Volkswagen brand chief Herbert Diess said at a Press conference in Wolfsburg. “All manufacturers must rebuild themselves because of the imminent changes for the industry. We need to brace for the storm.”
The labour agreement is critical to Volkswagen’s efforts to accelerate restructuring at its biggest unit and emerge from the worst crisis in its history. It also allows the carmaker to create more jobs in future-oriented technologies by retraining workers at traditional factories and hiring software engineers and battery specialists. The moves highlight the changes sweeping the auto industry as oldschool metal stamping and mechanical expertise make way for electronics and digital technology.
The VW brand is at the centre of Volkswagen’s changes. The unit accounts for almost half of the group’s sales and was struggling even before the emissions crisis erupted last year, tarnishing the marque’s reputation and burdening the 12-brand group with at least €18.2 billion in costs for fines and repairs.
Volkswagen shares rose 0.6 per cent to €118.30 at 11:17am in Frankfurt, reducing the drop since the scandal broke in September 2015 to 27 per cent.