Audi To Cut 9,500 Jobs To Fund Shift To Electric Vehicles

Topline: German carmaker Audi has revealed it will cut 9,500 of its 61,000 jobs in Germany by 2025 to free up funds to invest in electric vehicles.

  • The Volkswagen-owned luxury car brand says it will create 2,000 new jobs, specializing in digitalization and electric cars, and save $6.6 billion (€6 billion) as part of the shakeup.
  • The restructuring announcement emerged following talks between labor representatives and Audi. “The company must become lean and fit for the future,” Audi said in a statement.
  • Operational jobs will, however, be safe until 2029. Peter Mosch, chairman of Audi’s General Works Council, said, “We have reached an important milestone: The jobs of our core workforce are secure! The extension of the employment guarantee is a great success in difficult times.”
  • Audi is also increasing its capacity to produce electric vehicles. Plants in Ingolstadt and Neckarsulm are equipped to produce electric vehicles, Audi said, while more of its production lines will be equipped to do so.
  • Rival Daimler, which owns Mercedes-Benz, announced plans earlier this month to cut more than 1,000 jobs.

Crucial quote: Audi CEO Bram Schot said in a statement: “In times of upheaval, we are making Audi more agile and more efficient. ”

Key background: Germany’s auto industry, the powerhouse of Europe’s largest economy, has thrown a rod. BMW, Daimler and VW, like automakers around the world, are feeling the squeeze from a slowing global economy, the trade war between China and the United States, and mounting costs from developing electric vehicles.

Audi, and its parent, Volkswagen, have face additional challenges with an $881 million fine over the “dieselgate” emissions scandal last year and the cost of bringing its sports cars, sedans and SUVs in line with tough new European Union emissions regulations. The first Audi electric car hit the road in 2019, and VW plans to sell 1 million electric vehicles a year by 2025.

Source: https://www.forbes.com/sites/isabeltogoh/2019/11/26/audi-to-cut-9500-jobs-to-fund-shift-to-electric-vehicles/#34c132f07ab3

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