Volkswagen's luxury car unit Audi has announced that it is set to cut around 9,500 jobs - more than one in ten - in Germany by 2025 as part of a structural overhaul that will help fund the switch over to electric vehicles.
Audi logo. Credit: lincolnblues / Flickr
Credit: lincolnblues / Flickr
The job cuts will be achieved through an early retirement programme and natural turnover, the company said in a statement.
At the same time, Audi said it would create 2,000 new jobs in the areas of electromobility and digitisation as it pivots to smarter, cleaner car making..
The shake-up comes as Audi, like the rest of the automotive sector, grapples with slowing demand in a weaker global economy, tougher pollution rules and the huge investments needed for the battery-powered era.
"In times of upheaval, we are making Audi more agile and more efficient," said CEO Bram Schot.
"This will increase productivity and sustainably strengthen the competitiveness of our German plants."
The remaining roughly 50,000 workers at Audi's Ingolstadt and Neckarsulm factories will have job security until the end of 2029 under the hard-fought deal struck with labour representatives.
"We have reached an important milestone," said Peter Mosch, head of Audi's works council.
"The extension of the employment guarantee is a great success in difficult times."
Audi said the reorganisation would boost earnings by €6-billion by 2029, keeping the premium brand on track to reach a profit margin of 9 to 11%.
The company has also boosted spending on new technologies, including battery-electric and hybrid vehicles, connectivity and autonomous driving.
Like other brands in the Volkswagen group, it is still struggling to turn the page on the dieselgate scandal - the news that the auto giant fitted illegal "defeat devices" to fool regulators' emissions tests. In the wake of the scandal, Audi was ordered to pay a fine of €800-million for its role.
The company is one of many feeling the pinch from transition pains and still knocked by uncertainty over Brexit and the US-China trade war.
German car parts suppliers Bosch and Continental have themselves announced thousands of job cuts to slash costs, while Mercedes-Benz maker Daimler is reportedly planning to axe 1,100 managerial roles.
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