VW could trim 2,500 workers annually
Volkswagen‘s workforce may not be immune from cost cutting as the company attempts to solidify its financial footing in the wake of the diesel emissions scandal.
The German automaker directly employs more than 610,000 workers, spread across 120 production plants in dozens of countries. The number is exceptionally high when compared to rivals, nearly double Toyota‘s 349,000 head count and almost triple General Motors’ 215,000 employees. Production numbers for all three companies are extremely close, separated by just a few percent last year.
The company’s works council head, Bernd Osterloh, has warned that 2,500 positions could be eliminated annually over the course of a decade, according to a Handelsblatt report cited by Reuters.
The figure extrapolates to 25,000 jobs lost by 2026, only slightly narrowing the gap with Toyota. The company will presumably attempt to pursue modest reductions via voluntary early retirement, rather than direct layoffs.
VW so far has focused on ways to better align its operations with the expected transition toward electrification, promising to embrace such technology through 2025. Despite clarification at the top of its priority list, the company has not fully detailed which projects or operations could be subject to restructuring and trimming to help fund the long game while covering government penalties, lawsuit settlements and other costs associated with the diesel fiasco.
Recent reports suggest the US Department of Justice is weighing VW’s financial stability and job retention as it considers how high to push a criminal penalty. The number is expected to be at least a few billion dollars, potentially meeting or exceeding the existing $15 billion civil settlement.
It is unclear if Osterloh’s comments may be intended as a message to both workers and US prosecutors, pleading for mercy while indicating a willingness to publicly slash jobs in response to steep fines. Members of the German-style works council hold half the seats on VW’s supervisory board, allowing labor leaders to directly resist unilateral decisions to slash jobs.