VW brand to cut up to 7,000 jobs in new savings drive

You Can Finally Order Your Own Volkswagen I.D. Electric Hatchback Starting May 8

Volkswagen brand to cut up to 7000 jobs in new savings drive

The Wolfsburg-based company said Wednesday that the Volkswagen brand can cut the posts by not recruiting replacements for employees who retire, and so it can carry out "restructuring along the demographic curve".

"We will significantly step up the pace of our transformation so as to make Volkswagen fit for the electric and digital era", said Ralf Brandstätter, chief operating officer for the VW brand. Return on sales for VW's namesake brand a year ago fell to 3.8% from 4.2%t because of higher spending on future electric models and production bottlenecks triggered by stricter emission rules in Europe.

Volkswagen will cut up to 7,000 positions, aim to boost productivity and deliver 5.9 billion euros (5.1 billion pounds) of annual savings at its core VW brand by 2023, in its latest attempt to raise profitability at its top-selling division. Last year, the brand's operating margin fell to 3.8 percent, lagging peers such as Peugeot which delivered a margin of 8.4 percent. Diess, who also heads up the VW brand, has been axing slow-selling models and auto variants to reduce complexity. The shares have declined 4% in the past 12 months.

At least for now, any jobs cuts will be voluntary.

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At the same time, VW will create 2,000 new software jobs, as well as electronics positions in technical development, it said.

Volkswagen's push to launch so many electric cars is fueled partially by its adherence to the Paris Agreement.

"Given the interest in the I.D. family shown by our dealers, I think it is possible that the launch edition will already have sold out before we unveil the I.D.in September", stated Jürgen Stackmann, Volkswagen's board representative for sales, in the conference.

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