Volkswagen To Cut Up To 5,000 Jobs
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Carmaker Volkswagen plans to cut up to 5,000 jobs in Germany by offering early or partial retirement to older employees in a move that could cost 500 million euros ($598 million), the Handelsblatt newspaper reported on Sunday.
The newspaper quoted a spokeswoman confirming that the company had agreed on the plan with the works council to open partial retirement to those born in 1964, while also offering early retirement to older employees.
Handelsblatt cited company sources as saying Volkswagen was putting aside 500 million euros for the plan as it would compensate the employees who leave by topping up their pension, although it would save billions in the longer term.
The newspaper said Volkswagen is also extending a hiring freeze until the end of the year. It had previously only been in place until the end of the first quarter. External hires can only be made in areas like information technology and software.
The Volkswagen Group said in January it would cut overhead costs by 5% and procurement costs by 7% over the next two years.
Questions & Answers
Q.Which specific demographic group is being targeted for partial retirement under this new plan?
Which specific demographic group is being targeted for partial retirement under this new plan?
The company has agreed with the works council to offer partial retirement specifically to employees who were born in 1964. Older employees are also being offered early retirement as part of the job cutting initiative.
Q.What is the estimated immediate cost of this job reduction plan for Volkswagen?
What is the estimated immediate cost of this job reduction plan for Volkswagen?
Volkswagen is reportedly putting aside 500 million euros for this plan, which will be used to compensate employees leaving by topping up their pensions. This initial outlay is expected to lead to long-term savings.
Q.Until when has Volkswagen extended its hiring freeze?
Until when has Volkswagen extended its hiring freeze?
Volkswagen has extended its hiring freeze until the end of the current year. Previously, the freeze had only been scheduled to be in place until the end of the first quarter.
Q.Are there any exceptions to Volkswagen's current hiring freeze?
Are there any exceptions to Volkswagen's current hiring freeze?
Yes, Volkswagen will only permit external hires in specific critical areas. These exceptions include roles within information technology and software departments, allowing the company to still recruit for essential skills.
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