The Volkswagen board of directors approved on Thursday, unanimously, the company’s restructuring plan that could lead to possible job cuts of 50,000 positions.
The „future plan,” presented by the Volkswagen board of directors and approved during a supervisory board meeting, could involve reducing the group’s workforce by approximately 50,000 jobs, including management positions, as reported by Reuters.
The strategy aims to increase the efficiency and competitiveness of the Volkswagen Group and its brands, as well as to better position them for the future, the company stated in a press release.
Volkswagen stated that a new fundamental adjustment of the global workforce is necessary – in addition to existing programs – to achieve the objectives of the transformation initiative and to ensure the group's competitiveness.
The company did not provide further details on the timeline for the workforce reduction or how these measures will be distributed among its brands and regions.
Costs over 30% higher than competitors
The German car manufacturer cited increasing global competitive pressure, changes in demand patterns, and technological developments in the automotive industry as reasons for the planned measures.
CEO Oliver Blume stated in August that the group has overall costs more than 30% higher than those of comparable companies. Reducing this gap is considered essential for the company's recovery.
Blume specified that the figure of 50,000 jobs to be eliminated is not a fixed target.
Four plants in Germany facing difficulties
Volkswagen is also assessing the future of several German factories. The plants in Emden, Hanover, Zwickau, and Neckarsulm are not expected to reach a competitive capacity utilization level by 2030, according to Blume.
The CEO emphasized, however, that there is currently no decision regarding plant closures.
In July, Volkswagen announced plans for a significant reduction in its model range and production capacity.
T.D.