VW to cut 4,000 jobs via early retirement scheme

Volkswagen is to cut at least 4,000 jobs at its plants in Germany by offering early or partial retirement redundancies to selected older employees as a way of cutting losses from the pandemic in a move that could cost hundreds of millions of euros.

The company is working with the works council to offer partial retirement for anyone born in 1964 and full retirement for any worker born between 1956 and 1960.

Read more: VW closes 2020 stronger than anticipated despite pandemic

VW expects at least 900 workers to opt-in for early retirement with the rest expected to take up partial retirement but did to give any specific figures.

The automaker has announced it intends to recuperate some of these losses by offering over 2,000 IT positions over the next four years, as they take their steps towards becoming a tech company, pushing for innovation within autonomous driving, EV charging and electric vehicles.

The company ended 2020 on a strong note and expects sales figures to return to pre-pandemic levels in 2021 owing to a significant rise in deliveries.

This could lead to some negative optics about letting people go in this way, which may have prompted the investment in newer tech roles.

VW brand CEO Ralf Brandstätter said the company was "making [Volkswagen] fit for the digital age in a sustainable way."

Reuters reported at least 3,000-4,000 positions may be cut from the main six plants the brand operates in Germany, which currently boasts a workforce of over 120,000.

However other reports, such as from German business newspaper Handelsblatt estimate as many as 5,000 positions may be on the block.

The scheme may cost the automaker as much as €500 million, but the final figures are as yet unconfirmed. VW has yet to officially release any numbers.

The company's shift towards becoming a tech company is modelled on other successful tech-based automakers such as Tesla.

It is set to raise its training budget for upskilling its workforce to €200 million to help compensate for the jobs losses.

Read more: VW set to "accelerate" shift to electric vehicles

In the same announcement, VW said it will be undergoing a hiring freeze for the rest of 2021. The freeze was originally only planned for the first quarter to allow the market to return to normalcy.

Furthermore, the company has announced further highers will only be to aid in its digital transformation, such as in areas like electric cars, digitalisation and battery development.

Back to Homepage

Back to Transportation