VW wants to cut thousands of jobs in Germany again
Posted On March 14, 2021
Volkswagen wants to cut thousands of jobs in another round of deletion. To this end, the German company says it has agreed a new savings program with the works council. It contains a comprehensive age regulation package as well as an extension of the hiring freeze until the end of the year. The key points apply to the main VW brand with the six West German plants with 120,000 employees. According to insiders, 3,000 to 4,000 jobs will be cut.
The agreements provide that employees born in 1964 can now also go into partial retirement. There will also be an early retirement program for those born between 1956 and 1960. “Based on experience, the company expects that up to 900 employees will opt for the short-term early retirement models; a low four-digit number for partial retirement,” said a company release on Sunday.
Volkswagen commented neither on the savings nor on the costs of the austerity program. The savings depend on how many employees accept the new offers. According to Reuters calculations, they are likely to be in the order of 400 million euros, assuming that 4,000 jobs will be cut. According to a person familiar with the matter, the cost is just under 500 million euros.
Volkswagen Board Member for Human Resources, Gunnar Kilian, said: “We are strengthening the internal transformation of our workforce and building positions in the future areas – both through qualification and targeted external staffing. Against this background, we are also increasing the qualification budget by 40 million euros to 200 million euros.” The hiring freeze does not apply to the future areas of electrification, digitization and battery cell development. New hires from outside are also possible here. The Chairman of the General Works Council, Bernd Osterloh, was satisfied with the agreements. “The works council has made sure that the departures do not take place on the back of the other employees,” he explained.
For the core brand of the VW Group, agreements were concluded in 2016 and 2019 to cut thousands of jobs in a socially responsible manner. The carmaker wants to cut costs for the expensive conversion to electric cars. In return, redundancies due to operational reasons are excluded until 2029.