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Volkswagen to cut thousands of jobs through early retirement

Volkswagen to cut thousands of jobs through early retirement
Volkswagen to cut thousands of jobs through early retirement

Volkswagen, the leading automobile manufacturer is reportedly planning to cut as many as 4,000 jobs at its plants in Germany, by offering older employees partial or early retirement. This move could cost several hundred million euros, as per company sources.

The automaker in an official statement, stated that it had accepted a plan with the works council to grant partial retirement to those born in the year 1964 and to offer early retirement to those born between 1956 to 1960.

The firm further stated that it expects as many as 900 workers to choose the early retirement option, while others will go for partial retirement, without mentioning the exact figure.

Two company sources have reportedly revealed that around 3,000 to 4,000 jobs would be cut with respect to the programme to be carried out at the major Volkswagen brand’s six German plants, which currently employ as many as 120,000 people.

Leading business newspaper, Handelsblatt, which previously reported on the plan, stated that Volkswagen might cut as many as 5,000 jobs.

While Volkswagen refused to comment on the cost, which would depend on how many workers accept the offer, a source with knowledge of the matter has projected that the program could cost close to 500 million euros.  

As the 83-year old carmaker tries to become more of a renowned tech firm modelled on Tesla, VW has stated that it is increasing the training budget by 40 million euros to nearly 200 million.

The automaker has claimed that it is also expanding a hiring freeze until the end of this year. It had earlier only been in place until Q1. External hires are possible only in areas such as battery cell development, digitalization, and electric cars.

In January, the Volkswagen Group announced that it would cut overhead costs by nearly 5 per cent as well as procurement costs by around 7 per cent in the next 2 years.

Source credit: https://www.reuters.com/article/us-volkswagen-jobs/vw-to-cut-up-to-4000-jobs-via-early-retirement-sources-say-idUSKBN2B60CY

 

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Nandita Bhardwaj

Nandita holds a management degree with specialization in marketing, and boasts of a short-term experience in the field of recruitment. Following her passion for writing however, she decided to pursue a career in the field of content development. Presently, Nandita pens down news pieces for newsorigins.com, spanning the verticals of business, finance, and technology.