Volkswagen Group said it will shrink the workforce by up to 7,000 staff, raise productivity and make 5.9 billion euros worth of annual savings at its core VW brand by 2023 in a bid to raise the brand’s operating margin to 6 percent.
VW has ruled out compulsory layoffs until 2025, but early retirement will help the automaker to reduce its workforce between 5,000 and 7,000 positions, the company said.
“The measures from the earnings improvement program will enable our brand to achieve a competitive return level of six percent in 2022,” Arno Antlitz, Volkswagen brand’s board member for controlling, said in a statement on Wednesday.
Last year VW brand’s margin slipped to 3,8 %, down from 4.2 percent in 2017, VW said on Tuesday. Results were hit by delivery bottlenecks caused by Europe’s new WLTP emissions testing cycle and big investments in electric vehicles.