Volkswagen Plans to Cut Up to 100,000 Jobs Worldwide
Volkswagen Group, which includes brands like Porsche and Audi, is considering job cuts due to declining profits and increased competition from Chinese manufacturers.
By BBC News
Volkswagen Group's chief executive, Oliver Blume, has announced plans to potentially cut up to 100,000 jobs globally, a significant increase from the previously stated figure of 50,000. This decision comes as the company faces a steep decline in profits and heightened competition from Chinese car manufacturers entering the European market.
In a memo to staff, Blume highlighted that Volkswagen's costs are approximately 20% higher than those of its competitors, necessitating further reductions in expenditures. He stated, "We need to become more efficient, more robust and simpler. We must reduce our costs."
The company has struggled with falling sales, particularly in China, where sales dropped by 26% in the first half of the year compared to the previous year. In the United States, sales also fell by over 7%, partly due to tariffs on car imports.
Volkswagen's profits have seen a sharp decline, with operating profit decreasing from €22.6 billion in 2023 to just €8.9 billion last year. The group has been particularly affected by the competitive pressures from Chinese brands, which are introducing new technologies and benefiting from lower production costs.
In late 2024, Volkswagen reached an agreement with the German trade union IG Metall to cut 35,000 jobs at its main brand by 2030, alongside an additional 15,000 jobs across its other brands. However, the current discussions suggest that the potential job cuts could exceed these earlier figures.
Recent protests at Volkswagen sites in Germany have highlighted employee concerns ahead of a supervisory board meeting that includes both management and labour representatives. Some analysts speculate that the announcement of 100,000 job cuts may serve as a negotiation tactic, with the final number likely to be lower than initially proposed.