Redundancy programs at Volkswagen’s Cariad software unit will result in 1,600 job cuts by the end of this year. Cariad, established in 2020, is the automotive software division of the Volkswagen Group. Its purpose is to create and deliver synergistic digital technology for the company’s various car brands.
According to the German business newspaper Handelsblatt, approximately 30 percent of Cariad’s workforce, which numbers 5,900 employees, will be affected by these layoffs. A transformation plan for Cariad was put in place about two years ago, aimed at increasing efficiency and enhancing performance at the software firm. Now, the focus has shifted to reducing headcount.
Volkswagen (VW) has also been contemplating the closure of some plants in Germany as part of its efforts to regain competitiveness in Europe, which could result in thousands of additional job cuts. These German facilities employ around 120,000 workers.
In early December 2024, employees of Volkswagen, along with members of the IG Metall Union, protested against the significant job reductions. Rising costs and the growing popularity of electric vehicles (EVs) have compelled VW to consider drastic measures. The automaker, which owns ten well-known brands, is facing stiff competition in China. Additionally, political uncertainty has exacerbated its challenges, leading to a 64 percent decline in Volkswagen’s profits in October, with earnings dropping to 1.58 billion euros in the third quarter. Remarkably, in its 87-year history, Volkswagen has never had to shut down a factory.
