Volkswagen to cut up to 7,000 jobs to increase profits

The Hush Post|08:35pm| 1-min-read
In its latest attempt to raise profitability at its top-selling division, German automaker Volkswagen said it would eliminate up to 7,000 jobs by 2023. The cuts would be achieved via retirement offers, a company statement read.
The reason for the lay-off being given by the company is to accelerate its transition to electric vehicles. However, news agency Reuters said the company’s aim is to boost productivity and deliver 5.9 billion euros ($6.7 billion)of annual savings at its core VW brand by 2023.
“Volkswagen will be boosting the pace of its transformation… taking important steps this year to strengthen competitiveness on a sustained basis,” the company said in a statement.
It estimates that the automation of routine tasks will result in the loss of between 5,000 and 7,000 jobs by 2023.
In 2018, the brand’s operating margin fell to 3.8 percent. However, its contemporaries like Peugeot delivered a margin of 8.4 percent.
The VW brand is targeting a 6 percent margin in 2022.
At the same time, VW will create 2,000 new software jobs, as well as electronics positions in technical development, it said.

Leave a Reply