Volkswagen to eliminate 30,000 jobs in branding overhaul

The company’s chief said the move was ‘the biggest reform package in the history of [its] brand.’ The layoffs are part of a focus on new technologies and products.

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On Friday, the company announced that it plans to cut 30,000 jobs by 2020, with 23,000 of those layoffs affecting employees in Germany—and all coming through attrition.

The decision is not only a plan to boost the VW’s profits; it’s also part a rebranding strategy. The New York Times reported that the move aims to “improve profitability and shift resources and investment to electric-powered vehicles and digital services.”

Reuters reported:

The turnaround plan announced on Friday will lead to 3.7 billion euros ($3.9 billion) in annual efficiency gains and lift the VW brand’s operating margin to 4 percent by 2020, from an expected 2 percent this year.

That target still remains below rival European carmakers such as Renault (RENA.PA) and Peugeot Citroen (PEUP.PA), which are targeting an operating margin of 6 percent in 2021.

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