Germany: Volkswagen Group Announces “Massive” Cost Reductions
Workers at the German auto giant should be prepared for drastic layoffs. Bosch is also going to put several thousand of its workers out of business
Wrong strategy, weak demand in the European automobile market, and revenues that were well below expectations. In such terms, Volkswagen Group CEO Oliver Blum, in an interview with the Bild am Sonntag newspaper, outlined the current situation, but above all the “grim” prospects that await the automotive giant.
Blum “sees no alternative” to a restructuring and austerity program for the Volkswagen brand: “Mistakes that caused the economic problems were made in the past. Our costs in Germany should be significantly reduced,” said Blum, according to whom “group sales are now slightly higher than in the previous year, and our new products are being well received.” However, “we must reduce our costs,” and to do so, the car manufacturer’s CEO has appealed to his employees “to be prepared to accept cuts.”
Volkswagen Group profits fell 42% year-on-year in the third quarter of 2024 to €2.9 billion. After tax, profits fell almost 64% to €1.58 billion.
Things are not looking good for another well-known German company, Bosch, which said “it will not be able to meet its financial targets for the current year” and in this context “has not ruled out further job cuts.” Bosch management said “at least 7000 jobs will be at risk.”
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For a more in-depth look at the topic of the economic situation in Germany with a focus on the auto industry, we recommend Riccardo Fallico’s analysis “The German Car Industry Is Dying and Dragging the Country Into the Abyss Of Crisis”
