2024-09-19 23:18:31
Volkswagen has to make savings – and probably on a much larger scale than previously thought. In Germany alone, tens of thousands of jobs are said to be at risk.
The Volkswagen Group’s financial problems are apparently greater than previously assumed. In the medium term, the number of employees in Germany alone would have to be reduced by 30,000 to 100,000, reports “Manager Magazin” citing company insiders. Thousands of jobs in VW’s development division are also at risk, according to the business magazine.
At the same time, investments in the upcoming medium-term planning are to be reduced by 20 billion euros to 160 billion euros, it continues. These cuts would also affect the core VW brand. According to insiders, the savings are necessary because many areas of the group are falling short of their expected revenues. According to the report, the core VW brand alone is around four billion euros short of return expectations this year.
In the first half of the year, VW suffered from weak demand for new cars. Business is particularly weak in China, where the VW Group sells a good third of all cars. Sales shrank by 2.4 percent to 4.3 million vehicles. Due to weak demand, especially for electric cars, the group has also reduced production at other locations. The plants in Wolfsburg, Emden, Zwickau and at Audi in Ingolstadt and Neckarsulm have reduced capacity by a quarter and eliminated expensive night shifts.
VW recently announced that it would have to make major savings at its core brand. The previously planned job cuts through partial retirement and severance payments were no longer sufficient. Plant closures and redundancies at the core VW brand were no longer ruled out, Europe’s largest carmaker announced. The group recently terminated the job guarantee that had been in place since 1994 – this means that redundancies are possible from July 2025.
According to the magazine, things could get particularly bad in research and development. According to some forecasts, 4,000 to 6,000 of the approximately 13,000 employees in Germany would have to resign. Partial retirement and severance payments would not be sufficient measures to achieve this.
As part of its investment planning, VW had already announced that it would have to spend a lot on new technology, drives, batteries and software in the years 2023 to 2024 – but after that the investment rate should fall again anyway. Last year, 13.5 percent of sales in the automotive business were spent on property, plant and equipment and research and development, around 36.1 billion euros.
Volkswagen cannot confirm the media report about the planned reduction of up to 30,000 jobs. A spokeswoman said: “One thing is clear: Volkswagen must reduce its costs at its German locations.” This is the only way the brand can earn enough money for future investments. “How we achieve this goal together with the employee representatives is part of the upcoming discussions,” she said. VW cannot confirm the number mentioned.