Volkswagen’s 10 billion euro austerity program will also include workforce cuts, according to executives at the company, Reuters reported. Brand boss Thomas Schaefer warned that high costs and low productivity had made it uncompetitive.
The German automaker is in talks with the company’s works councils on the cost-cutting program, which is the first step on the road to increasing efficiency as part of the transition to electric mobility.
“With our current structure, processes and high costs, we are no longer competitive,” Schaefer said during a meeting with employees at the headquarters in Wolfsburg, BTA reported.
Until recently, the company said it would not lay off employees until at least 2029 and would only take advantage of the “natural demographic curve” to reduce its workforce.
However, at today’s meeting, the company’s head of human resources, Gunnar Kilian, said that this will now be achieved through early or partial retirement agreements. However, he said, the bulk of the cost-cutting program will be achieved through other means rather than layoffs.
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