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Volkswagen to invest $9B in software overhaul

Volkswagen AG will consolidate its fragmented software operations over the next three to five years under a $9 billion investment plan, Bloomberg News reported Sept. 14, citing Volkswagen brand's head of digital car and services Christian Senger.

Speaking during a presentation at the Frankfurt auto show, Senger reportedly said that the merged operations will employ as many as 10,000 developers.

In 2018, Volkswagen entered into a partnership with Microsoft Corp. to develop a cloud software platform known as vw.OS. Bloomberg said the German automaker plans to install the software in its electric, hybrid and combustion engine vehicles from 2020, with all new models expected to adopt the system by 2025.

According to the report, the investment plan comes as Volkswagen's global workforce braces for job cuts across its traditional carmaking business. In March, the Volkswagen brand announced up to 7,000 layoffs as part of a five-year, €5.9 billion annual savings plan to implement its digitalization drive and boost its electrification efforts. The group also reached an agreement with its employees in June to cut up to 4,000 jobs through 2023 as the company automates its administrative functions.