Volkswagen Layoffs: CEO of German Automaker Defends Decision To Cut Employees Amid Cost Saving Plan, Cites Economic Pressures
German automaker Volkswagen announced lay off as a part of its cost-cutting measure and massive plan to save nearly four billion euros. The company CEO defended Volkswagen layoffs decision by saying it was initiated due to the adverse economic conditions.
Wolfsburg, September 10: Volkswagen layoffs and the shutdown of the factories in Germany have worried some employees. The German automaker announced that it would cut several jobs amid the economic situation. Volkswagen CEO Oliver Blume defended the large-scale layoffs at the company and said they were announced due to economic pressure and cost-cutting measures
The VW layoffs aimed to cut around 4 billion euros (around USD 4.25 billion). The massive saving plan introduced by Volkswagen focused on cost-cutting, not the employees. Those affected by the job cuts were not promised severance pay and reduced contracts as it would not be sufficient for the company to meet its targets, according to a report by DW. Volkswagen To Begin Layoffs? Volkswagen Says Dropping No-Job Cuts Pledge, Won't Rule Out Closing Plants in Germany.
Regarding the Volkswagen layoffs, the company's board said that they would be terminating the job security program, which has existed since 1994. CEO Oliver Blume said that the European automobile industry was facing a challenging and serious situation. He added that the economic environment worsened, and new competitors were coming to Europe, making it difficult for the domestic industry to thrive.
The report mentioned that Volkswagen, despite becoming a known brand, fell behind companies like Skoda, Seat and Audi. In 2023, VW announced cuts, expecting that things would turn out to be great and help it save nearly 10 billion euros by 2026. This was deemed helpful while the company transitioned towards electric vehicles (EVs).
However, amid the announcement of layoffs, the union slammed the German automotive company, calling it an attack on employment, factories, and contracts. The movement was led by workers' council chairwoman Daniela Cavallo, who said that Volkswagen's future was in question and said she would resist bitterly. She added, "There will be no Volkswagen plan closures with me!" Tata Electronics Sign MoU With Tokyo Electron To Buy Semiconductor Equipment for Gujarat and Assam Units.
However, the termination of the job security program amid the workforce reduction puts the employees in a situation where they cannot get any support. The workers' representatives have been fighting on behalf of the workers as the company took away the severance packages of those nearing retirement to cut costs.
(The above story first appeared on LatestLY on Sep 10, 2024 12:33 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).