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Volkswagen Plans India Layoffs Amid Broader Global Cost Overhaul
Volkswagen is planning to reduce the number of workers in its India business.
The reported reduction is about 12% of its workforce.
The company wants to spend less money before investing in new vehicles, including an electric model.
Volkswagen says it is working to make its operations more efficient, but its India chief did not confirm the reported number.
The company may also give JSW Group control of its India business, according to people familiar with the matter.
Volkswagen is facing wider problems because electric cars can still be too expensive for many buyers.
It is also planning major job cuts in Germany.
German officials said plant closures have not been agreed.
Volkswagen also wants to make its cars less complicated and offer fewer customization choices.
Volkswagen Group’s India business plans to cut about 12% of its workforce.
The cost-cutting effort is expected to save tens of millions of dollars before Volkswagen’s next Indian investment cycle.
The company’s India chief, Piyush Arora, did not confirm speculative workforce figures but said operational optimization was continuing.
Volkswagen is reportedly considering giving Sajjan Jindal’s JSW Group a controlling stake in its Indian business.
Around 50,000 job cuts are expected in Germany, although officials said there is no agreement to close plants.
- Who
- Volkswagen Group and its India business, Skoda Auto Volkswagen India; the reported workforce reductions also involve Volkswagen employees in Germany.
- What
- The company plans to cut about 12% of its India workforce and is expected to eliminate around 50,000 jobs in Germany.
- Where
- The workforce reductions concern Volkswagen operations in India and Germany.
- When
- The India cuts are planned before Volkswagen’s next investment cycle; the German job reductions were discussed as part of a turnaround agreement reached Thursday.
- Why
- Volkswagen is trying to reduce costs amid industry challenges, including expensive electric vehicles, before launching its next generation of vehicles.
Cost Reduction and Restructuring
Employment and Plant Protection
India workforce cuts
Cost Reduction and Restructuring
Volkswagen is pursuing operational optimization and cost reductions before its next investment cycle and new vehicle launches.
Employment and Plant Protection
The reported 12% reduction would affect employees, while the company has not confirmed the specific workforce figure.
German job cuts
Cost Reduction and Restructuring
Volkswagen’s turnaround agreement includes major job reductions as the company faces pressure to lower costs.
Employment and Plant Protection
Lower Saxony Premier Olaf Lies said German plants such as those in Emden and Hanover should continue producing cars, while noting that alternatives may be needed where manufacturing is not possible.
Future of Volkswagen’s India business
Cost Reduction and Restructuring
A controlling stake for JSW Group could bring fresh capital into the business, according to people familiar with the matter.
Employment and Plant Protection
The reported ownership change is not presented as finalized, and Volkswagen’s India leadership has only publicly discussed operational optimization.
Key facts
- Planned India workforce reduction
- About 12% of Volkswagen’s India workforce
- Estimated savings
- Tens of millions of dollars in India
- India managing director and CEO
- Piyush Arora
- Potential India ownership change
- JSW Group could acquire a controlling stake, according to people familiar with the matter
- Expected German job cuts
- Around 50,000 positions
- German plant closures
- No agreement on plant closures has been reached
- Vehicle complexity target
- Volkswagen has said it will reduce the complexity of its cars by 75%
Quotes
Piyush Arora
Managing director and chief executive officer of Skoda Auto Volkswagen India
“While we do not comment on speculative figures regarding our workforce, our ongoing efforts to optimize operations across our Indian business units continue to gain momentum”
livemint.com
Olaf Lies
Lower Saxony state premier and Volkswagen supervisory-board member
“The day before yesterday, there was talk of closing the plants. With the decision (on the group's future), there is an opportunity to create prospects both in car manufacturing and, where that might not be possible, through other ways.”
livemint.com
Sources
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