Volkswagen plans to cut more jobs worldwide

Volkswagen Group CEO Oliver Blume has signaled another wave of deep cuts at the automaker that could bring total job reductions to 100,000 worldwide.

In a memo to employees on Monday, Blume said roughly 50,000 additional positions would need to go, to address a 20 percent cost disadvantage versus comparable companies.

“Since half of our overhead costs result from personnel costs, a theoretical calculation — assuming no change in labor costs — would result in the elimination of approximately 50,000 positions worldwide,” he said. “We are currently assessing across all brands, companies and regions how many adjustments are actually necessary and feasible.”

The group’s profits fell sharply last year — the result of falling sales in key markets and intensifying competition from rival brands.

The wider group — which includes Audi, Porsche, Seat, and Skoda as well as the VW brand — had previously said it would axe some 50,000 posts in Germany by 2030, reported the BBC.

Taken together, the cuts could lift total job losses at the automaker to 100,000, aligning with initial reports from late June. Outside Germany, the group operates factories and major employee centers in more than 20 countries.

Blume noted the company had been “unable to confirm” alternative uses for four factories in Germany that have previously been threatened with closure.

As reported by The Guardian newspaper, Blume told workers restructuring proposals were “the most comprehensive realignment in the company’s history” and centered on “12 initiatives, approximately 150 pages and 45 individual resolutions” for change.

“We need to become more efficient, more robust and simpler. We must reduce our costs,” said Blume. “I can fully understand how deeply the current situation affects people within the company, as well as everyone in its immediate circle. I have spent my entire professional life with the group.”

He also pledged to hold “constructive discussions” with employees and emphasized he was “doing everything in his power” to keep the company competitive enough to survive.

In the past week, widespread protests erupted at Volkswagen sites across Germany, ahead of a meeting of VW’s supervisory board, which includes labor representatives as well as company managers.

Industry analysts told Agence France-Presse that Volkswagen may have deliberately publicized the 100,000 figure as a negotiating tactic, and the final number of cuts is likely to be lower.

IG Metall, the main union representing the company’s workers, criticized the plans. Christiane Benner, chair of IG Metall, said the union had already made concessions and the proposals were not acceptable.

“Instead of taking this achievement as a model, the board is confronting employees with new downsizing plans. Understandably, the resulting anger and uncertainty are immense. We need new ideas and concepts for utilizing plant capacity, sensible considerations from the company,” she said.

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