Volkswagen-owned Audi announced on Tuesday that it plans to cut 9,500 out of 61,000 jobs in Germany between now and 2025, as part of its goal to overhaul the company.
Business daily Handelsblatt reported earlier that the German car brand, based in Ingolstadt, had reached this decision after restructuring negotiations between the management and the works council.
Audi told Reuters that as part of the negotiations, it will hire to 2,000 specialists in e-mobility and other future automotive fields, eventually levelling out the total job losses to 7500 jobs. The 50,000 employees at the two home plants in Ingolstadt and Neckarsulm are to be guaranteed employment until the end of 2029.
The dramatic job cuts are part of Audi’s cost-savings program, and should generate some €6bn (£5.1bn, $6.6bn) to invest in electrification and digitisation.
Like its parent Volkswagen (VOW.DE), and rival German carmakers BMW and Mercedes, Audi is under immense pressure to start mass producing electric vehicles — not only to compete in the new electric era, but also to avoid hefty fines under the EU’s new CO2 emissions standards.
Audi’s new chief executive Markus Duesmann is due to take over from interims CEO Bram Schot in April next year. He will take over a company still haunted by the tail end of the ‘dieselgate’ emissions-cheating scandal, that claimed the scalp of former CEO Rupert Stadler.
The German car industry has been warning about potentially sweeping job cuts in coming years as the move away from internal combustion engines to electric cars gathers speed. Fewer workers are needed to build and install e-vehicles, and the challenge will be to retrain workers, or find them jobs in other areas in what is Germany’s most vital employment sector.
The German state of Brandenburg declared itself “euphoric” earlier this month, when Tesla CEO Elon Musk announced he would build a plant near the German capital. The Tesla Gigafactory is expected to create thousands of new jobs.
Elon Musk said Brexit made it “too risky” to build Tesla’s first European plant in the United Kingdom.
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