Volkswagen Plans €10B Savings Plan With Staff Cuts Amid EV Shift: Report

The renowned German automaker Volkswagen AG VWAGY reportedly plans a substantial cost-saving initiative totaling €10 billion ($10.9 billion).

This program is set to include staff reductions as part of the company's broader strategy to enhance efficiency during its shift towards electric vehicle production, reported Reuters.

The German carmaker is in talks with its works council over a cost-cutting scheme at its VW brand, the report added.

As per the report, brand chief Thomas Schaefer communicated with the staff about the urgent need for the company to become more competitive and emphasized that the existing structures, processes, and high costs jeopardize the brand's competitiveness.

The company had previously committed to avoiding dismissals until 2029, focusing instead on leveraging the 'demographic curve' to reduce its workforce.

Gunnar Kilian, Volkswagen's human resources board member, stated that this reduction would be achieved through partial or early retirement agreements, the report added. However, he noted that the bulk of the savings would come from other measures beyond personnel reduction.

"We need to finally be brave and honest enough to throw things overboard that are being duplicated within the company or are simply ballast we don't need for good results," the report quoted Kilian.

Also Read: Volkswagen Accelerates EV Plans With Battery Factory Opening In China's Hefei: Report

Price Action: VWAGY shares are trading lower by 0.77% at $12.85 on the last check Monday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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