Right before Christmas, Volkswagen reached an agreement with German unions to reduce its workforce by over 35,000 people by 2030 through a "socially responsible reduction" program. This drastic decision is part of a broader plan to cut costs in the company's domestic market. Labor costs alone will be slashed by €1.5 billion annually, and total cost savings will amount to €15 billion annually in the medium term.
Despite radical decisions made after weeks of negotiations and factory strikes, more cost cuts are apparently necessary. Handelsblatt reports that the math still doesn't work in VW's favor. Sources familiar with the matter told the German business newspaper that "the cuts must be deeper." VW declined to comment on the matter, but insiders claim the company has already delayed its profitability target by 3-4 years. It had intended to achieve a 6.5% margin by the end of 2026.
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