Volkswagen to Cut Up to 5,000 Jobs Ahead of Earnings Announcement

[Asia Economy Reporter Yujin Cho] German automaker Volkswagen plans to cut up to 5,000 jobs, according to major foreign media reports on the 14th (local time).

According to reports, Volkswagen plans to reduce up to 5,000 employees out of a total of 120,000 workers at six factories in Germany. Volkswagen aims to save hundreds of millions of euros by offering early retirement to elderly workers approaching retirement age.

In a statement released that day, Volkswagen said, "We have agreed with the union on a plan to offer voluntary retirement to workers born in 1964 and those born between 1956 and 1960." The company expects that up to 900 elderly workers will choose early retirement through this reduction, resulting in cost savings of up to 500 million euros.

Foreign media interpreted this reduction plan as part of investments for transitioning to an electric vehicle company amid deteriorating performance due to COVID-19.

Last year, Volkswagen announced an emergency management plan to reduce about 7% of operating expenses by next year after sales volume dropped 15.2% compared to the previous year and global sales ranking fell to second place due to the impact of COVID-19.

Volkswagen is increasing its budget for electric vehicles and digital-related areas from 40 million euros to 200 million euros to achieve its goal of surpassing Tesla in electric vehicle production and sales volume.

On the 10th, Volkswagen announced its strategy to transform into a software-centered mobility company and popularize autonomous driving, setting a goal to capture 70% of the European electric vehicle market by 2030.

Additionally, Volkswagen stated that the employment freeze due to the COVID-19 impact will be extended until the end of this year, while exceptionally continuing hiring in the electric vehicle, digital, and battery sectors.

Meanwhile, Volkswagen will announce its fourth-quarter and annual results for last year on the 16th.

This content was produced with the assistance of AI translation services.