Volkswagen Management warns that the company may need to cut an additional 50,000 jobs to remain competitive with auto industry rivals, according to an internal memo sent to staff.
The German automaker previously announced plans to cut 50,000 jobs across the company, including at its Porsche and Audi subsidiaries, and CEO Oliver Blume said in a memo reviewed by Reuters that further cuts were necessary because Volkswagen operates at a 20% cost disadvantage compared to rivals.
The memo states that this situation means a “theoretical deduction” from another 50,000 jobs across the company’s entire global footprint, confirming earlier reports that Volkswagen was considering up to 100,000 job cuts.
“We are currently evaluating, across all brands, companies and regions, how many adjustments are actually necessary and feasible,” Blume said in the memo, according to Reuters.
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Volkswagen is considering an additional 50,000 job cuts on top of the 50,000 layoffs previously announced as part of a restructuring effort. (Elijah Nouvelage/Getty Images)
Volkswagen is Europe’s largest carmaker, but has seen profits fall due to rising tariffs and fierce market competition. Chinese market and pressure on its German manufacturing network to become more efficient.
Blume said in the memo that he preferred “smart solutions” to closing facilities, and had previously suggested that underutilized factories could be used for the defense industry or to produce Chinese Volkswagen models in Europe.
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Teleprinter Security Last Change Change % VWAGY VOLKSWAGEN AG 8,245 +0.04 +0.43% He said in the note that looking to the next decade, the company “still cannot confirm competitive use cases for plants in Emden, Hannover, Zwickau and Neckarsulm in the 2030s.”
Company executives have faced angry calls from workers demanding the automaker’s management explain its restructuring plans, which Blume presented to a supervisory board on Thursday.
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Volkswagen is seeking to halve its model range as part of a more efficient restructuring. (Eva Marie Uzcategui/Bloomberg via Getty Images)
Reuters reported that sources familiar with the matter said labor representatives The commission blocked proposals that would include job cuts and the possible closure of four factories.
Volkswagen’s statement after the stakeholder meeting did not mention job cuts or factory closures and instead announced plans to further reduce production capacity and gradually halve its production capacity. range of models.
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“Of course, it is understandable that everything has not yet been planned to the smallest detail and that certain issues still need to be discussed and evaluated in more detail,” Blume said in his message to workers. “There will certainly be other meetings in which we will work hard to find the best solutions.”
Reuters contributed to this report.
