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Volkswagen plans to save 10 billion euros in a cost-cutting program until 2026 by cutting a fifth of administrative staff costs.
The company emphasized that the purpose of the layoffs was to reduce costs rather than large-scale layoffs, and said it would take advantage of the trend of the baby boom generation retiring and adopt corresponding plans. Details of the cuts at Volkswagen’s passenger car brand will be announced in June, with negotiations currently underway between management and workers’ councils.
The cost-cutting is aimed at boosting profit margins from sluggish 3.4% to 6.5% in the first nine months of this year and is part of a company-wide effort to improve profitability as Volkswagen shifts to making electric vehicles.
Volkswagen is also reducing costs by offering part-time retirement plans to employees born in 1966, with about 3,000 expected to take them. The employment agreement signed with the workers’ council ensures employment stability until 2029.
(Source: Reuters Image source: freepik)
