Carmaker Audi has recently announced a plan to eliminate approximately 15 percent of its workforce in Germany in order to improve earnings by as much as $6 billion euros. That is equivalent to about $6.6 billion USD; and it will help Volkswagen AG’s biggest profit generator push ahead with a new restructuring plan that should help the company, as a whole, make the costly shift to electric cars.
Specifically, this turnaround is focused on picking up any ground recently lost to the luxury vehicle industry leaders—Mercedes-Benz, and BMW AG—as well as counter the gain that Tesla Inc has been making. With all of that going on, Volkswagen has had a rough time rescuing Audi from the turmoil of its diesel-cheating scandal in 2015.
That said, Audi expects to cut upwards of 9,500 jobs in Germany. This will help the automaker to streamline all operations at the company’s two main factories. Apparently these absolved positions will be reduced in one of two ways: attrition or volunteer (which includes taking an early retirement).
Speaking about the personnel overhaul, Audi spokesman Peter Mosch comments, “We have reached an important milestone. The jobs of our core workforce are secure. The extension of the employment guarantee is a great success in difficult times. In addition, the upcoming electrification of the Ingolstadt and Neckarsulm plants underscores the long-term success of both German sites.”
For the remaining 50,000 Audi employees, the company assures their jobs will be guaranteed through the year 2029. Furthermore, Audi says it will create another 2,000 new jobs that will serve to strengthen the engineering sector and pave the way for electric vehicles and other digital offerings.
Accordingly, Audi Chief Executive Officer Bram Schot notes, “We are now tackling structural issues in order to prepare Audi for the challenges ahead. In times of upheaval, we are making Audi more agile and more efficient.”
All of this has resulted in VW shares falling by as much as 0.8 percent, in Frankfurt this week. Fortunately that only pared a little off the stock’s gains this year, which is still up 27 percent on the year.