Volkswagen's Streamlining Mission
Volkswagen is on a mission to trim its costs, starting with a hiring freeze and early retirement offers. Now, it seems, they're planning to slim down their administration as well. The exact number of jobs at risk hasn't been revealed yet.
According to a report in Handelsblatt, Volkswagen AG aims to reduce its indirect costs by a fifth by 2026. This 'indirect area' includes Volkswagen's administration apparatus, employing about 40,000 office workers for both the VW brand and the Group.
The company hasn't provided a definitive figure on job losses either. A VW spokesperson mentioned that they won't have a set reduction target at Volkswagen, as they've shown in the past by leveraging personnel development in line with demographic trends.
The recruitment freeze and early retirement offers are already underway at Volkswagen. A spokesperson for the Works Council declined to comment on the report, citing confidentiality in negotiations with the Board of Management. They reiterated their stance: no reduction in collective wage agreements and no compromise on job security.
Volkswagen is currently in negotiations with the Works Council over multi-billion euro savings for their low-profit main brand VW. The first discussions took place in October. Back in June, Volkswagen announced a three-year program to enhance profitability. They aim to boost their VW brand's return to 6.5% by 2026, which was 3.4% in the previous quarter. To achieve this, they're planning to free up around ten billion euros through efficiency improvements and savings.
Negotiations within the Volkswagen Group regarding the VW brand's performance program could stretch into next year, according to Handelsblatt's report. They claim all measures for 2024 have been planned, but decisions for future years are yet to be finalized. It's suggested that major points with the Works Council might be agreed upon by the end of November or early December.
In line with their cost-saving measures, Volkswagen in Wolfsburg is considering administrative job cuts as part of their plan to reduce personnel costs in the indirect area by 20% by 2026. This could significantly impact the 40,000 office workers in Volkswagen AG's administration facilities.
Enrichment Insights:
Volkswagen's overall goal is to reduce 35,000 jobs by 2030, with a focus on cutting personnel costs in indirect areas from 2027 to 2030 by 32%, including 3% savings in the following years (1). This includes administrative job cuts, as part of their broader cost-saving measures.
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