Volkswagen's Cost-Cutting Move: 50 Thousand Employees Laid Off
The Volkswagen Supervisory Board approved a revision plan involving the global layoff of 50,000 employees to reduce costs.
Automotive giant Volkswagen is implementing a comprehensive revision plan that foresees the layoff of another 50,000 people globally, in line with increasing global competition and the goal of reducing costs.
Revision Plan Approved
The Volkswagen Supervisory Board unanimously approved the comprehensive revision presented by the company's executive board, called the Future Plan. In the statement made by the company, it was stated that the aim is to align the workforce capacity with economic realities in the face of increasing global competition and technological transformation.
Savings and Downsizing Goals
Within the framework of the approved plan, in addition to a global reduction of 50,000 additional jobs, a reduction in model diversity and a shrinking of the industrial footprint are foreseen. Furthermore, within the scope of savings measures, the vehicle portfolio is targeted to be narrowed by 50 percent by the year 2035.
Statements by CEO Oliver Blume
Volkswagen Chief Executive Officer Oliver Blume stated that the decision made is a very strong signal for the company's future. Blume noted that they will invest hundreds of billions of euros in the coming years to make their iconic brands stronger and more competitive.
Losses in the Chinese Market
The decline in the Asian market in particular and sales losses in China were influential in the global automotive manufacturer making this radical decision. Due to these negative developments, the company had experienced a sharp 30 percent drop in profit after tax in the first half of the year.