There was a remarkable development regarding the German automotive giant Volkswagen. Reuters claimed that Volkswagen would downsize. Moreover, the news source stated that he received this information personally from Volkswagen CEO Thomas Schafer. If the allegations are true, we can say that the balance in the automotive industry has begun to change.
According to Reuters, Thomas Schafer published an article that can only be seen on Volkswagen’s own server system. In this article, the CEO said that Volkswagen was not as profitable a company as it used to be. Reminding that a savings program worth 10 billion euros was created for this purpose, Schafer stated that this program will lead to austerity policy in many areas, including personnel reduction.
While Volkswagen’s costs increase, its profitability decreases
COVID-19 and the war that broke out between Russia and Ukraine increased the costs of all brands in the automotive industry. Volkswagen was also affected by this. However, the electric car transformation combined with this caused confusion, especially because the Chinese dominated the market. The fact that consumers can buy electric cars at a much cheaper price instead of models such as Polo or T-ROC has pushed Volkswagen to launch campaigns in many countries. All of these led to a decrease in the company’s profitability.
Thomas Schafer spoke on the subject as follows:
Volkswagen wasn’t considering mass layoffs until 2029
When Volkswagen announced its 10 billion euro savings program, it said it was not planning any mass layoffs. This decision would be valid until 2029. However, the latest point reveals that Volkswagen’s decision has changed. However, Volkswagen has also produced a solution on how to downsize without upsetting its employees.
According to information obtained, Volkswagen management held a meeting after the article shared by Thomas Schafer. Gunnar Kilian, who is responsible for the human resources unit, explained how Volkswagen will shrink in this meeting. According to Kilian’s statement, Volkswagen will lay off personnel by making partial or early retirement agreements.
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