Volkswagen Group Chief Executive Oliver Blume has confirmed the German car giant plans to cut up to 100,000 jobs worldwide, exactly twice the amount the company first announced last year.
The announcement comes amid a steep drop in the group's profits and a surge in competition from Chinese automakers that are entering the European market with cheaper, more technologically advanced vehicles.
Blume wrote in an internal memo that the Group’s costs are about 20 % higher than rivals and that it must reduce outgoings more than previously thought. He said that a “theoretical loss” of 50,000 jobs could occur if the current strategy is fully implemented.
The latest plan focuses on eliminating 35,000 jobs at the VW brand by 2030 – a figure agreed with the trade union IG Metall after threats of strikes – and an additional 15,000 cuts across the other brands in the group.
Plant closures loom for the German manufacturing hubs in Zwickau, Emden, Hanover and Neckarsulm, primarily because they are expensive to run and produce electric cars which face stiff competition in cost‑terms.
Last month the company faced nationwide protests as workers sought to avert large‑scale job losses, while analysts speculated that VW might have highlighted the 100,000 figure as a bargaining tool for negotiations.
