Experiencing Crisis, VW Performs Savings Including Reduced Staff Summary

Volkswagen ID.7. (Doc. Volkswagen Group)

JAKARTA - As a result of high costs and low productivity, Volkswagen announced it would make savings of 10 billion euros. One of the things the company does is reduce the number of staff.

Currently, the German automotive manufacturer is negotiating with the workers' board regarding the cost cutting scheme for the VW brand. This is the first step in the group's efforts to increase efficiency in the electric vehicle transition.

"With so many structures, processes and high costs pre-existing, we are no longer competitive as Volkswagen brands," said Thomas Schaefer, CEO of the Volkswagen Group.

Previously, the company would use the demographic curve to reduce the number of workers. This is done so that manufacturers do not need to cut off employment (PHK) until 2029.

The manufacturer said that this could be achieved through a partial or early retirement agreement. However, most of the 10-billion euro savings goals will be achieved through several steps in addition to employee reductions.

Volkswagen has experienced various problems in recent times, one of which is the termination of production at the Zwickau assembly facility, Germany. This resulted in the cessation of production of several MEB platform models.

In November, the manufacturer encountered problems in the facility due to a shortage of the latest AP550 electric motor supply assembled at the Kassel factory.

The factory previously had to stop production for its electric vehicles at this plant due to a lack of demand figures followed by subsidy reductions accompanied by rising inflation.