Volkswagen will reduce its staff by over 5,000 people

Volkswagen will reduce its staff by over 5,000 people


Volkswagen has announced that will reduce its staff by over 5,000 people as part of its plan to save money and finance their huge plan of electrification, which supposes an investment of 44 billion euros for the whole group. They are planning to launch 70 electric models in the near future.

Volkswagen chief Herbert Diess said in October that stringent proposals to cut CO2 emissions jeopardize 100,000 jobs in the company. He has repeatedly said that job cuts will necessarily happen, because they need fewer people to build an electric car, comparing to a traditional one.

Some German plants will be converted into production units for electric cars, but will also be accompanied by reductions in the number of employees. The list of suppliers of components will also be reduced, because electric cars have fewer components than conventional ones.

Volkswagen says that in four years the number of employees will have to drop by 5 000-7 000 through voluntary departures and retirements, and by 2025 there will be no rounds of layoffs. This plan could bring to the company savings of 5.9 billion euros.

The profit margin of the mark was 3.8% last year, compared with 4.2% in 2017, the target being to reach 6% in 2022.

The problem of the jobs has always been brought to the industry. Approximately 75,000 employees could lose their jobs in the German automotive industry by 2030, if forecasts will come true: that in the German car fleet, electric cars will be 25% and 15% hybrids, according to a study from June, published by Frauenhofer Institute.

An electric motor needs a number of parts 20% less than one functioning with gasoline and for the same number of engines, the production of the electric cars needs less than half the number of employees.

In Germany, 800,000 people work in the automotive sector, but the study is about engine manufacturing. As the engines for electric cars are much less complex and have a small number of parts, fewer people are needed to manufacture them. It takes 3,990 people to manufacture one million usual engines, while 1,840 people can produce one million electric car engines every year.