Volkswagen is reported to be cutting 30,000 jobs in the next three years after striking a deal with its labour unions.
The cuts are the result of the growing cost of the Dieselgate emissions scandal, but they're also aimed at increasing VW’s focus on autonomous and electric cars, according to a report from Reuters.
Some 23,000 of these job losses – which will come before 2020 - will be in VW’s native Germany. It hasn’t been made clear if these are widespread or concentrated within VW’s HQ at Wolfsburg. VW boss Matthias Mueller described the job cuts as "the biggest modernisation programme in the history of the group's core brand."
The spread of the other 7000 redundancies has also not yet been confirmed, but they are expected to be in North and South America, given VW’s now diminished presence in North America and the recession currently happening in South America. The BBC reports that Volkswagen has said none of the redundancies will be compulsory.
The cuts make up around 5% of VW’s 610,000-strong employee base (nearer one fifth in Germany, where 120,000 work for VW), but Reuters also reports that 9000 new jobs are to be created around the brand’s renewed electric vehicle push.
The aim of the move is to raise VW's operating profit from 2% to 4%.
The job losses are expected to trim €3.7 billion (around £3.1bn) from VW’s yearly outgoings. Earlier this year, VW put aside £13.6bn to cover the cost of the emissions scandal. Some £9.62bn of that will go on compensation for US owners alone.
Volkswagen has been negotiating the deal with its unions since June and will announce the cuts today at a press conference. No job losses elsewhere in the Volkswagen Group have been announced.
Dipan Sur
Viraaj Bhatnagar
Suraj Viswanathan
