Volkswagen layoffs: Work council says European carmaker cannot scrap job until 2030 amid 1 lakh job cuts plan
Volkswagen's plan to shut four factories in Germany and potentially cut as many as 100,000 jobs have hit fresh resistance from employee representative. The company's
Volkswagen's plan to shut four factories in Germany and potentially cut as many as 100,000 jobs have hit fresh resistance from employee representative. The company's works council has said that the European carmaker cannot overturn its employee guarantee, which runs until the end of 2030, according to the employee body's note seen by Reuters. The pushback comes amid reports that the Volkswagen is considering what could be its biggest-ever overhaul in the sector to boost competitiveness, according to several media reports. The work council's position could complicate the company's efforts to implement large-scale job cuts. Volkswagen says current job cuts are not enough The possibility of deeper job cuts emerged after Volkswagen's management told the car group's employee representatives that agreed scale of layoffs are not sufficient, according to a note from the works council seen by Reuters on Monday.
However, further job reductions have not yet been quantified, at least not to employee representatives, the note added. Earlier in March, the automotive giant announced that it would cut 50,000 jobs in Germany by 2030 after its profit fell to the lowest level in nearly a decade. "In total, around 50,000 jobs are due to be cut by 2030 across the Volkswagen Group in Germany," Volkswagen CEO Oliver Blume said in a letter to shareholders in the firm's annual report. He also added back then that the additional cuts will extend beyond the core Volkswagen brand, affecting workers of its premium marques Audi and Porsche, as well as the group's software subsidiary Cariad. Any major strategic decision, including large-scale layoffs or plant closures require approval from the carmaker's supervisory board, where labor representatives normally hold half the seats.
They currently occupy a majority after independent board member Susanne Wiegand didn’t stand for reelection, according to Bloomberg News. German govt opposes the shutdown of factories The fresh reports of factory closures in Germany have also received opposition from the German government. A government spokesperson said on Monday that Berlin aims to prevent domestic plant closures at Volkswagen, Europe's largest carmaker, Reuters reported. However, the government also stressed that the decision ultimately rests with the company. Why is Volkswagen shutting down its Germany factories and laying off employees? As per the agency report, the automaker has been under pressure from its Chinese rivals, US tariffs and slowing demand in Europe, which led to the discussions of a factory closure and potential large-scale layoffs. Shutdowns at such a major industrial group would deal a further blow to the German government's efforts to revive a sluggish economy and improve weak poll ratings.
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