Mumbai, Sep 4 (IANS): German car manufacturer Volkswagen has announced to cut 1 lakh jobs by the end of the decade in a sweeping cost‑cutting plan, marking the largest restructuring in the global auto industry.
The German carmaker announced a further reduction of about 50,000 positions on top of nearly 50,000 job cuts already agreed, amounting to about 15 per cent of the group’s workforce.
The company decided to halve the number of car models the Volkswagen group produces, which includes the Bentley and Audi brands, and considers to shut down four production plants in Germany within the next eight years.
“Given intensifying global competition, shifting demand and technological change in the automotive industry, a consistent alignment of workforce capacity with economic reality is essential,” the Volkswagen Group said in a statement.
Volkswagen employs over 6.5 lakh people across brands including Skoda, Seat, Porsche, Cupra and Lamborghini.
The group plans to streamline its model portfolio by around 50 percent and reduce its offering complexity by around 75 percent by 2035.
“The prioritised models aim to excel in design and technology – and benefit from the focus on fewer variants: Higher volumes per model, lower costs, stronger economies of scale,” the statement said.
The Volkswagen Group is systematically tailoring its platforms, electronic architectures, driver assistance systems and software to the needs of both the Western and Eastern hemisphere, it added.
In North America, the Volkswagen Group will focus on the most profitable segments. In China, the Group is adapting to revised expectations for overall growth in the Chinese automotive market and is expanding its export business toward the “Global South,” the statement added.
The company said that portfolio of shareholdings and businesses will be rigorously assessed and streamlined by around one-third to retain only those with a clear strategic and financial contribution to the core business.
“Non-strategic activities will be divested or realigned. The real estate portfolio will also be reviewed. The goal is to have a leaner structure and more effective use of capital,” the company said.
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This report was published from a syndicated wire feed. Apart from the headline, the EdexLive Desk has not edited the copy.
