Volkswagen Announces Comprehensive Restructuring and Workforce Reduction
Due to global competitive conditions and declining profitability, the company has decided to reduce its workforce by 8% and halve its product range by 2035.
The Volkswagen Supervisory Board has approved a 'Future Plan' that includes a global workforce reduction of 50,000 employees to cut costs and maintain competitiveness.
Details of the Future Plan
The new strategy approved by Volkswagen management aims to shrink the company's industrial footprint and increase operational efficiency. In this context, it is planned to lay off 50,000 employees worldwide.
This workforce reduction corresponds to approximately 8% of the company's total staff of 650,000. The company describes this step as a necessary move to adapt to economic conditions.
Contraction in Product Portfolio
In addition to the workforce reduction, Volkswagen aims to narrow its vehicle portfolio by 50% by 2035. This strategy aims to use resources more efficiently by reducing model diversity.
CEO Oliver Blume stated that hundreds of billions of euros will be invested to increase the competitiveness of iconic brands, emphasizing that the company will focus on technological transformation.
Economic Reasons Behind the Decision
Sales losses in the Chinese market and a 30% decline in after-tax profit in the first half of the year played a decisive role in these radical decisions.
The technological transformation in the automotive sector and changing demand balances have forced the company to reduce costs and reconsider its operational structure.