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.
![Ragan Insider Content](https://s39940.pcdn.co/wp-content/themes/ragan-theme/img/insider_600x350_lockdown.jpg)
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.
![Ragan Insider Logo](https://s39940.pcdn.co/wp-content/uploads/2018/05/ragan-insider-logo.jpg)