VW: CEO Blume is considering cutting up to 100,000 jobs over the coming years
The company’s senior management are planning a major restructuring, involving a reduction in investment and the spin-off of brands. The closure of factories in Germany is also expected. This is reported by Manager Magazin
Volkswagen’s CEO, Oliver Blume, is aiming to cut up to 100,000 jobs from the company’s current global workforce over the coming years, according to Manager Magazin.
Details are therefore beginning to emerge regarding the Group’s cost-cutting plan, which has been under discussion in recent weeks, after Michael Leiters, CEO of the subsidiary Porsche, speaking at the shareholders’ meeting, had also stated his readiness to reduce and deepen cooperation within the Volkswagen Group in order to cut development costs, whilst also announcing the start of discussions with the trade unions.
But the parent company appears to be stepping up the pace. The German business publication reports that Blume intends to reduce the Volkswagen Group’s investment by around 15 per cent, bringing it to just over 130 billion euros (148 billion dollars) over the next five years.
According to the report, the main Volkswagen brand (which has been suffering from low profitability for years) and the component manufacturing plants would be spun off from the group’s current structure to form separate entities. In the medium term, Volkswagen also plans to close its production plants in Hanover, Zwickau and Emden, as well as a plant belonging to its sister brand Audi in Neckarsulm – all located in Germany – ceasing production once the life cycle of the models currently manufactured at these sites has come to an end.
The plans, presented by the CEO during a management board meeting earlier this week, include doubling staff cuts to a maximum of 100,000 (the group currently employs around 657,000 people). Blume’s renewed push for restructuring will be presented to the supervisory board next month for discussion. The strategy also envisages cutting overheads by €11 billion ($12.5 billion) by the end of this decade. Volkswagen “must undergo a profound transformation,” said a company spokesperson, declining to comment on the specific details of the report.
