Volkswagen announces up to 7,000 job cuts

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German car giant Volkswagen said on Wednesday it would slash thousands of posts to cope with its transition to electric and autonomous driving the day after reporting rising profits, saying heavy costs for investments meant savings were needed elsewhere. Chief executive Herbert Diess had on Tuesday trumpeted rising sales and profits across the sprawling 12-brand group in 2018, the third year after its “dieselgate” emissions cheating scandal broke.

“In our industry you need a margin of between five and six percent, otherwise you can’t tackle the transition” to new technologies, CFO Antlitz said. Wednesday’s slashing of up to 7,000 jobs comes on top of an already-announced plan for 21,000 cuts worldwide, contributing around six billion euros to operating profits at the VW brand by 2023.

On top of job cuts, VW plans to improve productivity at its factories and reduce the size and complexity of its range — compensating the increased costs linked to electrificationBy 2022, the operating margin should hit six percent, Antlitz said.

Most of the job cuts are expected to be carried out through retirement offers. It is estimated that 11,000 Volkswagen employees will be eligible for retirement in 2019. At the same time, the company plans to add 2,000 jobs in research and development.

Across the whole group, Volkswagen employs almost 665,000 people worldwide, close to 50,000 of them in administrative roles.

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