Targets to save €3.7 billion per year, Volkswagen axing 30,000 employees globally; will invest heavily in electric car and battery production
In a bit to save itself after Dieselgate scandal, German automaker Volkswagen is planning to axe 30,000 employees globally by 2020. Among this huge job cuts, 23,000 are from Germany alone. By axing such a large number of employees, the company wants to save around €3.7 billion per year, which it plans to invest in the electric car and battery production.
The VW believes that, this move will increase its profit margin up to 4% by the end of this decade, compared to 2% in last year. But this move also means that, the company will lose 5% of its total workforce. In fact, it has more than 6 lakh employees across the world at present. According to an agreement between the Volkswagen and its strong works council, the jobs will be shed by not filling the vacancies.
Volkswagen is already slapped with $15 billion fine over the Dieselgate, which has been the biggest scandal in its history. To salvage itself from the situation, the automaker has set a strategy for next 10 years. According to this plan, the company’s goal is to power one-quarter of its total vehicle fleet by batteries by 2025.
To fuel its EV dream, Volkswagen now plans to invest €3.5 billion in new technologies and its German factories. Also, the company plans to hire 9,000 employees for software sector, which will concentrate on electric vehicles. In September 2016, at the Paris Motor Show, Volkswagen unveiled the ID concept, which gave us preview of the company’s first five-door electric hatchback.
The electric motor in Volkswagen ID concept can churn out 168 bhp of peak power and the car comes with an impressive driving range between 400 km to 600 km. Apart from electric hatchback, VW is also working on fully electric powered SUV, sedan, MPV and a sportscar as well. According to its ambitious plan, VW wants to roll out 30 EVs by 2025.