Estimated elimination of 50,000 roles to bring carmaker's total workforce cuts to 100,000
Volkswagen Group CEO Oliver Blume has hinted at another round of sweeping cuts at the carmaking giant that could double its workforce reduction total to 100,000 employees, according to reports.
Blume told employees in a memo on Monday that approximately 50,000 cuts would have to be made again in a bid to reduce costs after calculating a 20% cost disadvantage relative to comparable companies.
"Since half of our overhead costs result from personnel costs, a theoretical calculation – assuming no change in labour costs – would result in the elimination of approximately 50,000 positions worldwide," Blume said in the memo quoted by The Guardian.
"We are currently assessing across all brands, companies and regions how many adjustments are actually necessary and feasible."
The proposed elimination of approximately 50,000 positions comes after the company recently agreed to an initial 50,000 cuts across the group, including its Porsche and Audi subsidiaries.
This could bring the total job cuts at the carmaking giant to 100,000 employees, similar to initial reports in late June.
Blume acknowledged that the proposed restructuring was "the most comprehensive realignment in the company's history," The Guardian reported.
But he also promised to hold "constructive discussions" with employees, stressing that he was "doing everything in his power" to keep the company competitive enough to survive.
"We need to become more efficient, more robust and simpler. We must reduce our costs," Blume said as quoted by BBC.
The widespread layoffs at Volkswagen come amid a series of challenges facing the carmaker, including declining sales in China and North America, as well as the tariffs from the United States.
