Volkswagen admits it is no longer competitive and plans job cuts

The Volkswagen group has been going through a difficult time in recent months, particularly due to disappointing sales of electric cars. A transformation plan will therefore be put in place, aiming to achieve 10 billion euros in savings and achieve an operating margin of between 9 and 11% by 2030.

Volkswagen is struggling to sell its electric cars

At the level of the Volkswagen brand, its boss, Thomas Schäfer, recognized in an internal memo that “the situation is very critical, many markets are under pressure. Our orders, especially for electric cars, are lower than our expectations. With our existing structures and our high costs, we are no longer competitive.” Volkswagen is therefore suffering from competition from Chinese manufacturers, or even Tesla, and has already had to reduce the production of its electric cars. Employees were also let go in Germany.

The leaders of the Volkswagen group spoke to staff representatives on Monday to negotiate the details of the transformation plan. Employees should be informed of its content on December 6. The German giant had already indicated that it planned to use the demographic curve to reduce its workforce. In other words, these measures should take the form of early retirement and the non-replacement of retiring employees, for example.

“We must expect that in many places there will be fewer people”, announced Gunnar Kilian, board member and head of human resources. However, he indicated that most of the savings to be made within this plan would come from measures other than job cuts.

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