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.
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.”
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.
Become a Ragan Insider member to read this article and all other archived content.
Sign up today
Already a member? Log in here.
Learn more about Ragan Insider.
