Volkswagen to slash 30,000 jobs… in eight years’ time
The German carmaker said the job cuts will lead to annual savings of S$5.6 billion by 2020.
As part of a global restructuring, German carmaker Volkswagen announced in November it would be cutting 30,000 jobs globally from its core brand, with 23,000 of the cuts to be made in Germany.
Volkswagen and its labour unions came to the agreement in exchange for a commitment to avoid forced redundancies in Germany until at least 2025.
The plans were made in the aftermath of the automobile manufacturer’s diesel emissions scandal that many felt tarnished its image and left it with billions of euros in fines and settlements.
The job cuts will bring about annual savings of €3.7 billion (S$5.6 billion) by 2020, and will lift the core brand's operating margin to 4% in that year, up from an expected 2% in 2016.
In the same announcement, the company also pledged to create 9,000 new jobs in the areas of battery production and mobility services at factories in Germany. This reflects in part the company’s efforts to shift output toward electric and self-driving cars to keep up with competition.
Volkswagen chief executive, Matthias Mueller, said the restructuring was "the biggest modernisation programme in the history of the group's core brand".
"The Volkswagen brand needs a real shake-up and that is exactly what the future pact has turned out to be.”