Volkswagen to reduce headcount at 'no longer competitive' VW brand

Volkswagen brand chief Thomas Schaefer.
Volkswagen brand chief Thomas Schaefer.
Image: Supplied

Volkswagen's €10bn (R203.52bn) savings programme will include staff reductions, managers told staff on Monday as brand chief Thomas Schaefer warned high costs and low productivity were making its cars uncompetitive.

The German carmaker is in the midst of negotiations with its works council about a cost-cutting scheme at its VW brand, the first step in a group-wide drive to boost efficiency in the transition to electric cars.

“With many of our pre-existing structures, processes and high costs, we are no longer competitive as the Volkswagen brand,” Schaefer told a staff meeting at headquarters in Wolfsburg, according to a post on the company's intranet site and seen by Reuters.

The company previously said it planned to take advantage of the “demographic curve” to reduce its workforce, having pledged it would not carry out dismissals until 2029.

In Monday's meeting, human resources board member Gunnar Kilian said this would be achieved through agreements on partial or early retirement.

However, most of the €10bn savings goal would be achieved through measures other than personnel reduction, Kilian added, with the full details to be defined by the end of the year.

“We need to be brave and honest to throw things overboard that are being duplicated within the company or are simply ballast we don't need for good results,” Kilian said.


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