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Volkswagen to cut up to 4,000 jobs by 2023 in digitalization push

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Volkswagen to cut up to 4,000 jobs by 2023 in digitalization push

Volkswagen AG on June 5 said it will shed up to 4,000 jobs through 2023 after reaching an agreement with employees on a €4 billion digitalization plan to modernize more aspects of the company's administration.

The noncompulsory cuts will be carried out through regular staff turnover and will target nonproduction and administrative units of Volkswagen AG Passenger Cars, Volkswagen Group Components and Volkswagen Sachsen GmbH. The move will, in turn, create about 2,000 jobs related to digitalization.

"Agile working methods, improved processes and digitalization are to reduce the burden on employees and speed up processes. Tasks that used to be performed manually are to be simplified through improved IT," Volkswagen said in a press release.

"If we have to eliminate jobs as a result of digitalization, we are doing so along the demographic curve in the most socially responsible manner possible," Ralf Brandstatter, COO of the Volkswagen brand, said in the statement.

As part of the digitalization drive, Volkswagen will deploy the SAP 4/Hana software system for administrative applications as well as more efficient systems for purchases and human resource management.

All the personnel changes resulted from agreements between the company's senior executives and the general works council, which represents employees. They also agreed on productivity increase of 5% per year in production units through 2023. The company will increase its training budget by €60 million to €160 million to develop new skills required for the digitalization push.

The 2,000 new jobs will be created at Volkswagen's headquarters in Wolfsburg, which the company will expand to accommodate the larger workforce.