Automotive giant, Volkswagen, is set to potentially reduce its internal headcount with a multi-billion-dollar cost-cutting program, as reports cite VW’s Chief stating that the brand is “no longer competitive.”
The news comes from Reuters who says that VW’s chief, Thomas Schaefer, is looking to introduce new cost-saving measures to address “high costs and low productivity,” according to the report.
Volkswagen first addressed its cost-cutting plans in June this year, stating that it needed to trim around 10 billion euros worth of fat from its operating costs.
That report cites a memo posted on VW’s intranet portal and reportedly seen by Reuters from Schaefer stating that “with many of our pre-existing structures, processes and high costs, we are no longer competitive as the Volkswagen brand.”
The report adds that “the company has previously said it planned ot take advantage of the ‘demographic curve’ to reduce its workforce, having pledged that it would not carry out dismissals until 2029.”
In a meeting earlier this week, VW’s board member for human resources, Gunnar Killian, reportedly said that the company was aiming to make a range of partial or early retirement agreements with some existing staff.
The report states that “the bulk of the 10 billion euro savings goal would be achieved through measures other than personnel reduction,” with details of the plan set to be expanded upon later in the year.
“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,” Killian is quoted as saying.
Looking forward, Volkswagen has major plans for its future battery-electric lineup, including a brand-new platform set to underpin the upcoming Golf EV, as well as a revised take on the MEB modular platform.
