Volkswagen, the German car-making giant, is reportedly preparing to axe as many as 100,000 jobs over the coming years, a figure representing 15 per cent of its global workforce.
This significant contraction includes the proposed closure of four factories in Germany and a 15 per cent reduction in investment over the next five-year period, according to a report on Friday by the German business publication, Manager Magazin, reports CNN.
The restructuring plans for Germany’s largest automaker also involve spinning off the main Volkswagen brand and its auto parts business into separate entities. The group, which remains one of the nation’s major employers, also owns several other brands, including Audi and Porsche.
A spokesperson for Volkswagen declined to comment on what they termed “internal, confidential documents,” noting that such matters must be discussed and approved by the respective committees. However, the spokesperson acknowledged that the company requires a “sharper focus as well as stricter discipline over costs and investment” to adapt to a new reality.
They stated that the traditional business model of manufacturing cars in Europe for global export “no longer works” for all of its brands. The company currently employs approximately 660,000 people across the globe.
These potential cuts would follow previously announced plans to slash 50,000 jobs in Germany by 2030. In the United States, the firm operates one assembly plant in Chattanooga, Tennessee, which employs more than 4,000 workers.
Like many European car makers, Volkswagen is currently being squeezed by fresh tariffs on its exports to the US, while struggling to counter the rise of Chinese electric vehicle manufacturers, such as BYD.
The proposed measures are expected to meet fierce resistance from German unions. The labour union IG Metall and Volkswagen’s General Works Council issued a joint statement on Friday, vowing to prevent such plans “with all our might”.
Market reaction reflected the company’s ongoing difficulties, with shares of Volkswagen down 1.5 per cent in early afternoon local time. The company’s stock has dropped by more than a quarter so far this year.
