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Volkswagen to reduce its workforce in order to increase profits

Volkswagen is laying off thousands of workers in order to cut costs, citing low productivity.

Volkswagen has announced plans to reduce its workforce in the coming year to increase profitability. The decision comes as the automaker attempts to resurrect its stalled transition to electric vehicles.

In an official statement to the media, Gunnar Kilian, Volkswagen Group’s chief human resources officer, acknowledged the need for a socially responsible workforce reduction. Furthermore, the goal is to cut personnel costs in non-production areas by approximately 20%.

The emphasis will be on implementing as many partial and early retirement programmes as possible. In addition, the management will meet in Wolfsburg, the company’s headquarters.

There are no specific numbers for the upcoming job cuts, but they may affect several positions and roles across its 10-brand group, including marques such as Audi, Skoda, and Seat.

The 20% reduction may not necessarily imply a 20% reduction in the workforce. Most of the cost savings will be realised by improving processes and making structural changes.

Volkswagen announced the elimination of 269 temporary positions at its Zwickau headquarters in September. It currently employs approximately 6,75,800 people worldwide.

Thomas Schaefer, the head of the Volkswagen brand, has announced certain cost-cutting measures. These include cancelling plans to build a new research and development (R&D) centre, and speeding up the product development process.

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