Job cuts at the car company
Volkswagen wants to shrink its administration
November 13, 2023, 4:42 p.m
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In order to save costs, Volkswagen wants to slim down. A hiring freeze is already in effect, and there are also partial retirement offers. Now the group is apparently also planning to turn things around in administration. It is still unclear how many jobs will be lost.
According to a media report, the Wolfsburg car manufacturer Volkswagen has named initial measures for possible workforce reductions as part of its austerity program. As the “Handelsblatt” reported, citing an internal VW podcast between brand boss Thomas Schäfer and Human Resources Director Gunnar Kilian, Volkswagen AG’s personnel costs in the so-called indirect area are expected to fall by a fifth by 2026. The indirect area includes Volkswagen’s administrative apparatus, which employs around 40,000 office employees from both the VW brand and the group.
The company left it open how many jobs would be lost as a result. A VW spokeswoman said there was no general reduction target at Volkswagen. “As proven during the transformation, the company will continue to use the personnel development potential of the demographic curve.”
There is currently a hiring freeze at Volkswagen, and there are also partial retirement offers. A spokesman for the works council declined to comment on the report, pointing out that negotiations with the board were confidential. “Our guidelines are well known and we reiterate them here: We cannot make collective bargaining cuts or compromises in our job security,” he added. “Economic efficiency and job security are and will remain equally important and common goals at Volkswagen.”
Volkswagen is currently negotiating with the works council about billions in savings for the low-profit main brand VW. The first discussions were held in October. The car manufacturer announced a performance program in June to trim profitability within three years. The volume brand is expected to increase the return to 6.5 percent by 2026 – in the past quarter it was 3.4 percent. Around ten billion euros are to be freed up for this through efficiency improvements and savings.
The “Handelsblatt” also reported that negotiations in the Volkswagen Group about the performance program for the core VW brand could drag on until next year. Accordingly, all measures are already in place for 2024, but the plans for the following years have not yet been finalized. According to the report, the management around brand boss Schäfer assumes that the most important key points could be agreed with the works council by the end of November or beginning of December. The works council declined to comment on the schedule.