Tuesday , August 22 2017
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Volkswagen: 30,000 jobs to be fired, to save €3.7 billion a year by 2020

German automaker Volkswagen announced cutting off 30,000 jobs in an attempt to recover from its diesel emissions scandal and steer its investments more in electric-powered vehicles and digital services.

The company officials told media at its Wolfsburg headquarters in Germany said that the measures will save some 3.7 billion euros a year from 2020.

Volkswagen has agreed to pay $15 billion under a settlement with U.S. authorities and owners of some 500,000 vehicles with software that turned off emissions controls.

Around 11 million cars worldwide have the deceptive software. The company made this move to address problems such as excessively top-down management and excessive fixed costs at its manufacturing locations in Germany.

The company has said it aims to cut nonessential costs and investments and shift investment toward battery-powered cars and services such as car-sharing and ride-sharing.

CEO Matthias Mueller said it was “the biggest reform package in the history of our core brand.” In addition to Volkswagen, the company also makes cars under other brands including Porsche, Audi, SEAT, Skoda and Lamborghini.

Herber Diess, head of the core Volkswagen brand, said that Volkswagen had let its costs rise and “lost ground in terms of productivity”

Volkswagen Group, with its multiple brands, has more than 600,000 employees but the cuts will mainly fall on its 120,000-strong German work force.

Top employee representative Bernd Osterloh said that “the next generation of electric vehicles will be made here in Germany, not abroad.” Other job cuts are foreseen in Brazil and Argentina.