Volkswagen plans to lay off 14,000 employees to make up for emissions scandal losses

According to foreign media reports, in order to make up for the losses caused by the emissions scandal, Volkswagen plans to save 3 billion euros by saving labor costs, and the Volkswagen brand hopes to formulate a corresponding plan this year and reduce about 14,000 employees in the next ten years without paying severance pay.

So far, about 7,000 long-term employees have signed early separation agreements with Volkswagen, which were drafted on an ad hoc basis and abbreviated in German as ATZ.

Karlheinz Blessing, HR director of Volkswagen, said: "Based on our assumption of natural personnel turnover, another 2,200 employees will choose to leave in the future." When asked whether he hoped that these employees would also sign the ATZ early resignation agreement, Blessing said: "This is what we want. We hope that they will sign this early resignation agreement as much as possible."

In addition, Volkswagen hopes to eventually lay off all 4,500 temporary workers, which of course includes natural turnover, so that the final net departure number can reach 14,000.

As part of Volkswagen's "Future Plan", which aims to increase production capacity by 25% in the next four years, the Volkswagen brand plans to reduce 23,000 employees in Germany by 2020. At the same time, the Volkswagen brand also hopes to add 9,000 employees in some new technology fields, such as digitalization and e-mobility. According to the agreement, 9,000 employees will be transferred from some personnel who gradually stop their current work, thus meeting the requirement of a net layoff of 14,000. According to the plan, the Volkswagen brand expects to have more than 100,000 employees in Germany.

Cost is the key and policy implementation needs to be flexible

Blessing said flexibility is essential in implementing the plan. The first financial consideration is to lay off temporary workers, most of whom are young and strong. But laying off these temporary workers also threatens the achievement of energy efficiency targets, with production capacity expected to be reduced by 7.5% in the first two years and 5% in the next two years. The first to be affected is the Emden plant, which is mainly responsible for the production of Volkswagen Passat and the new Arteon mid-size car. The plant also obtained tax exemption rights from the local government, which means that it can temporarily employ hundreds of employees.

In addition, Blessing also said that Volkswagen will cut employees as much as possible and use tools to replace labor while being able to meet production capacity targets.

However, layoffs are difficult for the management team, and the mandatory dismissal of employees has damaged the agreement with the union to a certain extent. In addition to the ATZ agreement and natural turnover, Volkswagen plans to force employees to leave the company by terminating the severance pay provided to employees.

Blessing said that severance pay is our best option, but it should be implemented according to individual circumstances. In 2006, Volkswagen implemented a severance pay plan on a large scale, especially when the so-called "social plan" was enforced, Volkswagen had to lay off some high-quality employees, and these employees were also in short supply in the market.

The company will not be able to achieve profitability until the end of 2019 or around 2020 after cutting 14,000 employees. By the end of this year, 1,700 permanent employees and 2,000 temporary employees will choose to leave according to the ATZ agreement.

Blessing said that by moving into the field of e-mobility, the complexity of production and the production time of each vehicle will be reduced, but at the same time we will also face huge challenges.

It is not yet clear how many jobs will be created by digitalization and mobility services, and Volkswagen's overall sales in Europe are unlikely to increase substantially, so this is a huge challenge for Volkswagen. Fortunately, the "Future Strategic Plan" launched by Volkswagen may help Volkswagen get on the right track.

In addition, Mueller said on Wednesday that Volkswagen is currently in close talks with potential partners in Europe and China on battery production. Volkswagen plans to produce batteries at its new research base in Salzgitter, Germany, and plans to invest $9.8 billion in electric drive by 2022, a three-fold increase from previous investments.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.