Volkswagen has revealed it will axe 23,000 tasks in the next five years as part of a restructuring plan to help the distressed German carmaker bounce back from the diesel emissions scandal.
VW and its trade unions have been working on a plan to revive the brand’s future because June. The cuts are estimated to save the VW group €3.7 billion (£3.2bn) a year, with the company wishing to increase its profit margins from 2 per cent to 4 per cent.
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The group will cut 23,000 tasks in Germany alone, but has insisted the reduction in the workforce will be accomplished without compulsory redundancies. Instead, it will cut the tasks through “natural fluctuation and partial early retirement, taking the demographic curve into account.” The VW group currently employs 610,000 people across 31 countries
The cost savings are much needed, as VW is dealing with an ever-growing legal bill. earlier in the year, the group agreed to a record-high settlement worth $14.7billion (£12billion) in the us to compensate impacted owners. individual lawsuits against the company are also building up.
Part of the agreement is said to include VW’s future commitment to electric vehicles. Last year, VW group revealed its new technique 2025, a plan to build 30 electric cars in the next decade. part of the technique includes improving the efficiency of the German plants by about 25 per cent, according to VW.