Car company announcing layoffs: “We’re no longer competitive”

A 10 billion euro austerity program by Volkswagen Group will include staff cuts, managers told employees on Monday, as VW brand chief Thomas Schaefer warned that high costs and low productivity were making his cars uncompetitive. Reuters.

The German carmaker is in the middle of talks with its works council over a cost-cutting scheme at the VW brand, the first step in a group-wide attempt to increase efficiency in the transition to electric cars.

“With many of our pre-existing structures, processes and high costs, we are no longer competitive with Volkswagen,” Schaefer told a staff meeting at the automaker’s Wolfsburg headquarters, according to a post on the company’s intranet website seen by Reuters.

The company previously said it plans to take advantage of the “demographic curve” to reduce its workforce, pledging no layoffs until 2029.

At Monday’s meeting, human resources board member Gunnar Kilian said this would be done through partial or early retirement agreements.

However, most of the €10bn savings target would be achieved through measures other than staff cuts, Kilian added, with full details to be finalized by the end of the year.

“We finally have to be brave and honest to throw away things that are duplicated within the company or are simply ballast that we don’t need for good results,” said Kilian.