Audi will cut these jobs in the administration and development sectors first, which next?
We all know that Chinese automakers have become so good at selling their cars, electric vehicles (EVs) and internal combustion engine (ICE) vehicles alike, that every other country has been forced to either slap on tariffs or compete with massive discounts but apparently, this is not enough for one particular German brand.
Audi, under the Volkswagen brand, has announced it plans to cut up to 7,500 jobs in Germany by 2029. These will be primarily in the administration and development sector but there is no telling which sectors are next. The brand aims to save the carmaker approximately 1 billion euros about RM4.8 billion) annually in the long run.
Moreover, the Audi job cuts are part of a larger cost-saving initiative within the Volkswagen Group, which is aiming to reduce nearly 48,000 jobs across its brands. Volkswagen itself has announced plans to eliminate 35,000 positions, while Porsche intends to cut 3,900 jobs and software unit Cariad is looking to trim around 1,600 roles.
Audi’s decision comes after a series of workforce reductions aimed at restructuring the company for a shift toward EVs. Since 2019, Audi has already reduced around 9,500 production jobs, which the company said would help fund its transition to EV production and improve profit margins, targeting a margin of 9 to 11 percent.
However, Audi has also been facing significant challenges recently, with its operating margin declining to 4.5 percent in the first nine months of 2024, down from 7 percent in the same period of 2023. This decline is attributed to weak sales in key markets and the high costs associated with closing its Brussels plant.
On top of that, despite the job cuts, Audi has announced plans to produce a new entry-level EV at its Ingolstadt plant, with consideration for additional EV models at its Neckarsulm site. This move is seen as a positive development by labor representatives, who had concerns about the potential for carmakers to shift EV production to lower-cost countries.
Audi has also extended its job security guarantee for its German employees until the end of 2033, providing some reassurance to workers. Joerg Schlagbauer, head of Audi’s works council, commented on the negotiations, saying, “The discussions were tough, but always focused on finding solutions. We had to make compromises to ensure financial flexibility for additional investments.”
We got all this from Reuters and their full article is linked here. Thank you Reuters for the information and images.
