WOLFSBURG (dpa-AFX) - German automaker Volkswagen AG announced plans for job cuts and hiring freeze at the January 2021 level to cut cost. This is part of its digital transformation roadmap to focus on electric vehicles and other new technologies.
In the extensive retirement package, the company said up to 900 workers are expected to opt for early retirement, while a low four-digit figure would take partial retirement up to the end of 2023.
Training budget has been increased by 40 million euros to a total of 200 million euros for future jobs.
Meanwhile, German financial newspaper Handlesblatt reported that around 5,000 people could leave the firm, and the plans could cost around 500 million euros.
In a statement, Chief Human Resources Officer Gunnar Kilian revealed options for early retirement scheme and partial retirement for employees born between 1956 and 1962, while partial retirement to employees born in 1964.
Further, Volkswagen decided to extend the 'level freeze' introduced in 2020, and announced plans to freeze the size of the workforce at the January 2021 level. Unoccupied positions will also be evaluated as part of the fixed cost reduction program, the company said.
Volkswagen added that external new hires are still planned in forward-looking areas such as electrification, digitalization and battery cell development.
Kilian said, 'Disciplined cost management will continue to be necessary to finance the required investments in the future, to remain competitive and, above all, to make it possible to safeguard jobs in the long run.'
Copyright RTT News/dpa-AFX