Moving towards electric cars, Volkswagen plans a 6% cut of his workforces by 2023 and 2,000 new software jobs positions.
At Volkswagen’s annual media conference in Wolfsburg, VW commented on its new strategy to cut from 5,000 up to 7,000 jobs by 2023. Through reducing such operating costs, VW aims to save 5.9 billion Euro ($6.7B). The German automaker will invest the savings in its top-selling division - which generates more than a third of the company’s total sales - in an attempt to raise the operating margin to 6%. Last year, the brand’s operating margin fell to 3.8% where Peugeot read a margin of 8.4%.
The new strategy comes a day after VW said it would invest in electric cars that are less complicated to build and require fewer workers. VW is moving away from gas-powered engines and is expected to spend a total of $19 billion, over the next five years, to produce electric cars and strengthen competitiveness on a sustained basis. VW claimed they plan to offer 20 more electric models (for a total of 70) and sell 22 million electric vehicles over the next ten years.
VW didn’t provide any specifications about the departments that will see job cuts; we only know that they would mostly be a result of “automation of routine tasks.” Job cuts would not come through straight layoffs, but from early retirement offers - 11,000 workers will be eligible for retirement by 2019.
The Company also commented on its plan for the future. By 2023, VW wants to reduce, from 90% to 50% the hardware engineering and actively increase software engineering by hiring 2,000 employees in the next years.
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