Volkswagen’s Software Unit Cariad Faces Delay in Software Launch Due to Layoffs
Image Credits: Porsche
Volkswagen’s software unit, Cariad, has announced a delay in the launch of its new software architecture as it undergoes a significant round of layoffs. Just three years after its establishment and six months after an executive shakeup, Cariad plans to cut 2,000 jobs, according to a report by German publication Manager Magazin.
These layoffs will further impact the release schedule of VW’s software architecture 1.2, resulting in a delay of 16 to 18 months. The software 1.2 platform, originally slated for completion in 2022 and developed for the Porsche Macan EV and Audi Q6 E-Tron, was previously pushed to the end of 2023 under the leadership of Peter Bosch, who assumed the role in May. However, it now appears that the software 1.2 platform will not be available in vehicles until at least 2025.
While VW’s vehicles currently operate on the software 1.1 version, Cariad is also working on a 2.0 version, an operating system designed for all VW Group brands. Initially planned for a 2025 launch, the recent layoffs have forced Cariad to redevelop the software from scratch.
Volkswagen has not confirmed whether these layoffs will impact the release date of the Macan EV itself, scheduled for early 2024.
The reported restructuring also affects the next-generation Scalable Systems Platform, an architecture intended for use in EVs across Volkswagen’s lineup, including VW hatchbacks and Porsches.
VW has faced challenges in launching software in its vehicles, putting it at a disadvantage compared to competitors such as Tesla, Ford, and General Motors, who have embraced software-defined vehicles. Beyond enhancing car functionality, software-defined vehicles provide automakers with opportunities to generate additional revenue through in-car entertainment and services. In 2021, VW Group estimated that Cariad could generate up to €1.2 trillion ($1.4 trillion) in revenue by 2030 through subscriptions and other sales.
Cariad has experienced several setbacks and delays, resulting in various leadership changes. Most recently, in May, CEO Dirk Hilgenberg was replaced by Peter Bosch, who previously held a manufacturing role at VW’s Bentley brand. Bosch spearheaded the reduction of 2,000 staff members as part of a broader restructuring plan.
The downsizing plan has been approved by VW Group’s board of directors and is expected to occur between 2024 and the end of 2025. However, it still requires approval from VW’s works council, which has guaranteed jobs for workers until mid-2025.