BERLIN (AP) — Volkswagen’s 10 billion euro ($10.9 billion) cost-cutting plan will include layoffs, managers told employees on Monday, as brand chief Thomas Schaefer warned that high costs and low productivity were making the company’s vehicles uncompetitive.
The German automaker is in talks with its labor council about a cost-cutting scheme at its VW brand, the first step in a group-wide effort to boost efficiency in the transition to electric vehicles.
The company had previously stated that it intended to use the “demographic curve” to reduce its workforce, pledging not to fire anyone until 2029.
Gunnar Kilian, a member of the human resources board, stated at the meeting on Monday that this would be accomplished through agreements on partial or early retirement.
The majority of the 10 billion euro savings goal, however, will be achieved through measures other than personnel reduction, according to Kilian, with the full details to be defined by the end of the year.