Volkswagen To Cut Workers Because The VW Brand Is “No Longer Competitive”
Volkswagen is known for being one of the most popular automakers in the world, as well as being a prime example of German engineering for cars with a long life expectancy. Unfortunately, many VW employees won’t be around with the company as long.
According to a report by Reuters, Volkswagen will be attempting to keep itself afloat by implementing some “redundancies” in an effort to save itself approximately $11 billion. This is a result of the auto market’s constantly shifting landscape with many highly competitive rivals and varying customer preferences.
Volkswagen is also losing significant market share in China in an effort to avoid engaging in a price battle with Tesla. As a result, VW had to halts its production of EVs in Europe as the overall demand for electric cars continued to drop.
Why Is VW Making Employee Cuts?
Thomas Schaefer, the CEO of the VW brand (not to be confused with the VW Group) was very blunt and direct at a recent staff meeting after telling attendees that the company has become “uncompetitive” in its current form as a result of high costs and lack of consistency within the company.
“With many of our pre-existing structures, processes, and high costs, we are no longer competitive as the Volkswagen brand,” Schaefer said at a staff meeting at the Wolfsburg HQ, according to Reuters.
At this same meeting, attendees were also informed that the organization would be cutting back on workers under the premise of them agreeing to “partial” or “early retirement.” It was also mentioned that the $11 billion VW aims to save will be invested through other business measures instead of job cuts.
The Future of Volkswagen
“We need to finally be brave and honest enough to throw things overboard that are being duplicated within the company or are simply ballast we don’t need for good results,” says human resources board member Gunnar Kilian, according to Reuters.
This does not come as a surprise to Volkswagen. VW has long been aware of its escalating problems for a while, with many company officials spotting excessive spending throughout many departments.