(Bloomberg) -- Renault SA is reducing working hours for roughly 13,000 of its staff in the greater Paris region as it seeks to cut costs in response to a slump in vehicle orders.
The company's engineering and support workers based around the French capital will be given Fridays off through mid-August, according to an internal memo seen by Bloomberg. Workers will be paid the same, with part of their salaries funded via state unemployment benefits.
The impact of the pandemic on orders and a shortage of semiconductors for production “reinforces the need to control our fixed costs,” Renault said in the memo. The measure, confirmed by a spokesman on Wednesday, prolongs and deepens an existing part-time work program.
The move signals the crisis in the European auto industry is far from over. Countries from Germany to France have kept Covid-19 restrictions in place amid slow vaccination rates, and manufacturers including Renault and rival Stellantis NV have repeatedly cut factory output due to a global shortage in semiconductors.
Renault last week reported a record annual loss and a drop in vehicle sales by more than a fifth. Chief Executive Officer Luca de Meo is now pushing through plans to shore up profits, repair the troubled partnership with Nissan Motor Co. and cut costs by closing sites and eliminating 14,600 jobs.
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