Volkswagen to reduce headcount at 'no longer competitive' VW brand

Volkswagen to reduce headcount at 'no longer competitive' VW brand

Automotive News Europe — 2023-11-27

Automotive Industry

Volkswagen Group’s  €10 bn ($10.9 bn) savings program will include staff reductions, managers told staff on Monday as brand chief Thomas Schaefer warned that high costs and low productivity were making its cars uncompetitive.

The automaker is in the midst of negotiations with its works council over a cost-cutting scheme at its VW brand, the first step in a group-wide drive to boost efficiency in the transition to electric cars.

"With many of our pre-existing structures, processes and high costs, we are no longer competitive as the Volkswagen brand," Schaefer told a staff meeting at the automaker's headquarters in Wolfsburg, according to a post on the company's intranet site and seen by Reuters.

The company had previously said it planned to take advantage of the "demographic curve" to reduce its workforce, having pledged that it would not carry out dismissals until 2029.

In Monday's meeting on 27 November , human resources board member Gunnar Kilian said this would be achieved through agreements on partial or early retirement.

However, the bulk of the 10 bn savings goal would be achieved through measures other than personnel reduction, Kilian added, with the full details to be defined by the end of the year.

"We need to finally be brave and honest enough to throw things overboard that are being duplicated within the company or are simply ballast we do not need for good results," Kilian said.