Volkswagen cuts staff to reach earnings of $6.5b in 2024

The news: Volkswagen has reached an agreement with workers to reduce administrative and personnel costs, in order to contribute €4 billion ($6.5 billion) to the Volkswagen Group in 2024.

The numbers: The flagship brand will slash administrative staff costs by 20%, and it projects that it should deliver a profit of 6.5% in 2026. The brand also expects to contribute €10 billion to the group by 2026.

The context: Volkswagen stated that it will implement a strategy to improve procurement services and production time in 2024, which the company expects will save over €520 million. It also expects that enhancing its after-sales businesses will generate over €250 million for the brand.

Volkswagen will maintain a current hiring freeze.

What they said: “With the agreement on the key measures we are taking a decisive step to move Volkswagen back to a leadership position. This requires not only structural but also personnel reduction measures. As a leading employer, it goes without saying that our actions will be socially responsible,” said Volkswagen’s group chief human resources officer, Gunnar Kilian.