Audi is due to cut 9,500 of 61,000 jobs in Germany over the next five years. The cost-saving measure is meant to free up funds for its electrification strategy…
Audi is preparing to slash thousands of jobs between now and 2025. All of the cuts will be made in Germany, and will entail savings of around £5.1 billion. This will largely be achieved via early retirement schemes. The automaker has stated, however, that its move towards electrification will create 2,000 new jobs. Its announcement comes only two weeks after Daimler announced it was cutting a thousand jobs itself.
In a statement, Audi explained the rationale behind the job cuts. It said the cuts would, “take place along the demographic curve – in particular through employee turnover and a new, attractive early retirement programme”. It added, “the company must become lean and fit for the future, which means that some job profiles will no longer be needed and new ones will be created.” It also stressed that operational roles would be secure until at least 2029. Peter Mosch, a spokesman for Audi, explained “the jobs of our core workforce are secure. The extension of the employment guarantee is a great success in difficult times. In addition, the upcoming electrification of the Ingolstadt and Neckarsulm plants underscores the long-term success of both German sites”.
The Price Of Progress
As is the case with many automakers around the world, Audi is investing eye-watering amounts of money in new technologies and manufacturing infrastructure. Most of this is geared towards the production of electric cars; mandated by ever tougher emissions standards and government-sponsored pressure. But the transition from diesels and petrols towards EVs is riddled with challenges. Demand for the zero-emission models remains very small throughout most of Europe. In addition, automakers are having to grapple with tough market conditions and challenging legislation concerning emissions. Audi, like its Volkswagen parent, was also forced to pay out 800 million Euros for its role in the Dieselgate scandal.
So far, Audi has released the all-electric E-tron; the first of 20 EVs due to be released by the company by 2025. It’s clearly serious about electrification and isn’t playing games in order to placate legislators or environmentalist groups. But the process is time-consuming and challenging, having come about at a time when the industry is sluggish at the best of times. To make matters worse, the EV industry is also getting exceptionally competitive, with an enormous amount of start-ups and legacy automakers simultaneously struggling to get a slice of the cake. By adopting a leaner financial approach, Audi is attempting to make up for lost time. Whether it’ll work or not is anyone’s guess.
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