Volkswagen will cut up to 7,000 positions, aim to boost productivity and deliver 5.9 billion euros ($6.7 billion) of annual savings at its core VW brand by 2023, in its latest attempt to raise profitability at its top-selling division.
A technician works on a Volkswagen Tiguan with TDI diesel engine during its final assembly at the Wolfsburg Volkswagen plant.
The carmaker's Audi and Porsche brands made up the lion's share of VW Group's operating profit.
That involves layoffs, up to 7,000 of them for the Volkswagen passenger vehicle brand alone, as announced today by the company.
German automaker Volkswagen say it will eliminate up to 7,000 jobs by 2023. At the same time, the company plans to add 2,000 jobs in research and development.
"We will significantly step up the pace of our transformation so as to make Volkswagen fit for the electric and digital era", said Ralf Brandstätter, chief operating officer for the VW brand.
The enormous carmaker's electric transition is driven by the need to conform to strict emissions limits on greenhouse gas carbon dioxide (CO2), set to bite in the European Union from 2020.
"Volkswagen is seeking to provide individual mobility for millions of people for years to come - individual mobility that is safer, cleaner and fully connected", said the official.
But the enormous investments needed are already weighing on performance and profit margins.
Besides plans to shrink its workforce, the VW passenger vehicle brand also targets to raise productivity and achieve €5.9 billion ($6.6 billion) worth of annual savings from 2023 in a bid to increase the operating margin to 6 percent.