The German car concern Volkswagen will cut several hundred jobs in factories in China over the next 3 years due to a drop in sales, reported ag. Bloomberg, citing its unnamed sources.
According to their information, the continued decline in sales has led to significant costs for the company, which it seeks to reduce through such measures. The job cuts in China are part of a strategy in which the group's management has set itself the goal of reducing global costs by 20% by 2026. At the same time, job cuts at Volkswagen's Chinese division will be happening in stages”, with some employees, including middle and senior managers, to be informed of the company's intentions as early as this week.
According to the agency's estimates, the reasons for the decline in Volkswagen sales in China are the general decline in consumer demand in the country, as well as the growing popularity of electric vehicles, including those produced by domestic competitors, including the BYD concern. Sources of ag. Bloomberg noted that another German automaker, Audi, also intends to resort to layoffs at its Chinese factories.
On September 19, Manager Magazin reported that Volkswagen plans to cut up to 30,000 jobs in Germany in the medium term. Earlier, VW CFO Arno Antlitz indicated that two plants may be at risk. The automaker itself could not confirm this information. Negotiations between Volkswagen and the IG Metall trade union, which represents workers' interests, will begin on September 25.
On September 10th, the newspaper Bild reported that the management of Volkswagen has ended the job guarantees for its employees, which have been specified in their employment contracts since 1994, as per this way opens the way to possible layoffs. On September 2, the DPA agency indicated that Volkswagen is allowing plant closures and layoffs as part of the savings program adopted in 2023. From the board's point of view, a major restructuring of the brands of the Volkswagen AG group is to be carried out. In addition, management believes that cost savings targets cannot be achieved through pre-planned job cuts through partial employee retirements and one-time payments.