BERLIN (Reuters) – Volkswagen will cut jobs at its eponymous brand as part of its 10 billion euro cost cuts, the carmaker’s executives said on Monday.
Volkswagen brand director Thomas Schaefer warned that high costs and low productivity made its cars uncompetitive.
The German group is negotiating with its works council a cost reduction plan for its Volkswagen brand, the first step in a group-wide plan as part of the transition to electric cars.
In June, the automaker said it would implement cost-cutting measures worth 10 billion euros by 2026 to achieve a sales profitability target of 6.5%.
“With a large number of pre-existing structures and processes and high costs, we are no longer competitive as a Volkswagen brand,” Schaefer said during a staff meeting at the group’s headquarters in Wolfsburg, according to a message published on the company’s internal website and consulted by Reuters.
Volkswagen had previously said it planned to take advantage of the “demographic curve” to reduce its workforce, after committing not to make layoffs before 2029.
According to Gunnar Kilian, member of the human resources council, this objective will be achieved with partial or early retirement.
However, most of the 10 billion euro savings target will be achieved through measures other than staff reductions, he added.
The main details should be defined by the end of the year.
“We must finally be courageous and honest enough to throw out the things that are duplicative within the company or that are simply ballast that we don’t need to get good results,” Kilian said. .
(Reporting Victoria Waldersee, writing by Matthias Williams; French version Diana Mandiá, editing by Kate Entringer)
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