Volkswagen Faces Massive Job Cuts Amid Cost Pressures and EV Competition

Volkswagen faces immense pressure to streamline operations and reduce costs, with reports suggesting potential job cuts of up to 120,000 positions worldwide. This drastic measure is aimed at bolstering the German automotive giant's competitiveness against agile Chinese electric vehicle makers.

The sheer size of Volkswagen's workforce, nearly 630,000 employees (or 680,000 including joint ventures in China), is a significant liability. This figure is substantially higher than rivals such as Toyota, Stellantis, and Ford. Once a symbol of German industrial might and profitability, this large employee base now presents a considerable challenge, forcing the company into painful restructuring.

This situation stems partly from strategic choices made years ago. According to Meghan Ostertag of the Information Technology and Innovation Foundation, Volkswagen's decision to develop a large portion of its components and software in-house increased its labor needs and associated costs. Production expenses in Germany can be as much as double those of competitors.

Furthermore, experts point to an aggressive acquisition strategy over the years, which integrated brands like Skoda, Porsche, SEAT, and Bugatti, along with truck manufacturers. Daniel Harrison of Ultima Media notes that while this strategy had some successes, integrating these diverse brands, supply chains, and platforms has made Volkswagen exceptionally complex to manage. Similar cost-cutting pressures are affecting other German automakers and suppliers, including Mercedes-Benz and Bosch.

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Tvrtka velik dio svojih komponenti i softvera razvija i proizvodi sama, što povećava potrebu za radnom snagom i naravno, troškove rada