- Volkswagen CEO Oliver Blume warned of up to 50,000 more potential layoffs globally
- The company faces a 20% cost disadvantage compared to its automotive industry peers
- Previous cuts of 50,000 jobs included reductions at Porsche and Audi subsidiaries
Volkswagen's chief executive officer (CEO) Oliver Blume informed employees in an internal memo that the company is mulling up to 50,000 more layoffs, in accordance with calculations to bring the firm in line with the cost competitiveness of its peers, as per reports on Monday.
Blume said that the automobile maker has a cost disadvantage of 20% in comparison to its peers and stated that it needed to engage in further cost -utting measures, as per a memo cited by Reuters. This development comes after the company had already undertaken 50,000 job cuts, spanning its Porsche and Audi subsidiaries.
Blume called these additional proposed layoffs a "theoretical deduction" which may be become an applied reality across the globe.
“We are currently assessing across all brands, companies and regions how many adjustments are actually necessary and feasible,” the Volkswagen CEO stated in the memo, as per Reuters.
The European vehicle brand has seen a downturn in its profits, owing to tariff policies which cost it billions in euros, along with strong competition from Chinese firms in the automobile space.
Labour representatives on the company's committee had voted in the ratio of 12-7, blocking the initial proposal regarding 50,000 job cuts and the closure of four factories.
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"As of today, we still cannot confirm competitive use cases for the plants of Emden, Hanover, Zwickau and Neckarsulm in the 2030s," Blume stated in the memo, according to Reuters.
The Volkswagen senior executive had also expressed his preference for "intelligent solutions", referring to the defence industry and the manufacture of Chinese Volskwagen in Europe as options for underused factories.
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