The Chief Executive Officer of the Volkswagen Group, Oliver Blume, has informed employees that up to 50,000 jobs will be cut worldwide. According to Blume, in a message published on the company’s internal intranet site, this figure stems from the plan to reduce administrative, infrastructure and similar costs as a basis to remain competitive.
The magazine ‘Der Spiegel’ was the first to report on this.
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It is reported that Volkswagen’s overall costs are 20 percent higher than those of comparable companies. An analysis is being conducted across all brands, divisions and regions to determine where such adjustments are necessary and feasible. Employee costs arise not only from the number of employees, but also from labor costs. “We must act in this direction as well,” said Blume, underlining that the exact scale of the workforce reduction has not yet been determined. For results, the job cuts that have now been specified would be “a theoretical figure assuming no change in labor costs.”
In addition to these 50,000 jobs, the group-wide target of cutting 50,000 jobs at VW, Audi and other brands, which has already been set, will also be added. According to Blume, more than half of the target will be achieved by the end of the year. In other developments, according to ‘Der Spiegel’, the VW group will thus eliminate 100,000 jobs, the majority of them in Germany.
Four VW plants remain in the crosshairs
Just last weekend, the CEO of VW assured the public in an interview with ‘Bild am Sonntag’, stating that he saw “smarter solutions” instead of closing plants, and emphasizing that the cost reduction measures at VW were not having an effect. Last year alone, production costs were reduced by an average of 20 percent.
VW’s plants in Zwickau and Emden, the Audi plant in Neckarsulm and the commercial vehicle plant in Hanover are considered at risk. Blume also commented on this: “The truth is that, as things stand today, we cannot confirm a competitive level of products for the plants,” said the CEO of VW.
With this interview, Blume is also responding to criticism from the works council. After a recent board meeting, the chairwoman of the works council, Daniela Cavallo, had given Blume an ultimatum to explain himself once and for all to the workforce. The general management of VW let that deadline pass last Friday. /DW
