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Volkswagen’s ‘Future Pact’ to Slash 30,000 Jobs Globally

Volkswagen’s ‘Future Pact’ to Slash 30,000 Jobs Globally

Volkswagen’s chief executive, Matthias Müller, has announced that the company plans to cut 30,000 jobs worldwide, with Germany bearing the brunt of the losses with 23,000 jobs set to go. The cuts should save the crisis-stricken car manufacturer €3.7 billion annually by 2020. Mr Mueller called the plan “the biggest modernisation programme in the history of the group’s core brand“. Volkswagen has also said that it will seek to create 9,000 jobs through investments in new products and aims to increase the brand’s profit margin from 2 per cent to 4 per cent. Its German staff representative, Bernd Osterloh, has assured employees that “the next generation of electric vehicles will be made here in Germany” and that no compulsory redundancies will be made.
Theo Leggett, BBC business correspondent, has expressed the view that the plan represents a culture shift at the car manufacturer, rather than an unwise move to alienate its heartland’s workforce. Early retirement is likely to serve as the bulk of the job cuts, and with the creation of 9,000 ‘future proof’ jobs many workers will move into new positions instead of being made redundant.
Volkswagen currently employs 610,000 people in 31 countries, and comprises of 12 brands from seven European countries. The company previously agreed to pay a historic sum of $15 billion in settlement with the US authorities and about 500,000 vehicle owners.

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