VW slashes 100,000 jobs

Picture Credit: by Quartz

Volkswagen, one of the world's largest automakers, is reportedly planning to axe as many as 100,000 jobs over the next few years, representing 15% of its global workforce. The cuts would come alongside the closure of four factories in Germany and a 15% reduction in investment over the next five years, according to a report Friday citing internal company documents.

The report added that Volkswagen, Germany's biggest automaker and one of its largest employers, is planning to spin off its main VW brand and auto parts business into separate entities. The company also owns Audi, Porsche, and several other major brands.

A Volkswagen spokesperson declined to comment on "internal, confidential documents," saying only that "the underlying matters will be discussed and approved in the respective committees" and that the company "will not pre-empt this process."

Volkswagen employs almost 660,000 people worldwide and had already announced plans to slash 50,000 jobs in Germany by 2030, meaning the new figures would mark a dramatic escalation of an already painful restructuring. The company operates one US assembly plant, in Chattanooga, Tennessee, employing more than 4,000 workers.

Like much of Europe's auto industry, Volkswagen has been squeezed on two fronts: fresh tariffs on exports to the United States, and intensifying competition from Chinese electric vehicle makers such as BYD. The spokesperson said the company needed "sharper focus as well as stricter discipline over costs and investment," acknowledging that its traditional model of building cars in Europe and exporting them globally "no longer works" for all of its brands.

The plans are already drawing fierce resistance. Labor union IG Metall and Volkswagen's General Works Council issued a joint statement Friday warning: "If such plans are pushed forward, we would prevent them with all our might."

Volkswagen shares fell 1.5% on the news and have now dropped more than a quarter so far this year.