Carmaker Audi to cut 7,500 jobs in Germany

Audi is planning to cut a total of 7,500 jobs in Germany, the carmaker announced on Tuesday.

The Volkswagen subsidiary said that it will cut up to 9,500 jobs by 2025, but will also create up to 2,000 new positions in areas such as electric mobility and digitalization, under an agreement reached by the company’s management and the works council.

The job cuts will not entail forced redundancies, but rather “take place along the demographic curve – in particular through employee turnover and a new, attractive early-retirement programme,” Audi said in a statement.

The company has an employment guarantee for its workforce that it said will be extended from 2025 to 2029.

Audi and its works council had long been negotiating a “future pact” for the company, which has been in a slump ever since the 2015 diesel emissions scandal and has fallen behind its competitors Daimler and BMW.

The agreement also foresees the “optimization of production capacities” at the carmaker’s two German plants in Ingolstadt and Neckarsulm. Annual plant capacity will be set at 450,000 vehicles for Ingolstadt and 225,000 vehicles for Neckarsulm, Audi said.

The current capacity in Neckarsulm is 300,000 vehicles yearly, but the plant – which mostly produces the Audi models A4 to A8 and R8 – has long been underutilized because of the crisis facing cars with traditional combustion engines.

Audi expects the agreement to help generate 6 billion euros (6.6 billion dollars) in savings.

“In times of upheaval, we are making Audi more agile and more efficient,” chief executive Bram Schot said. “This will increase productivity and sustainably strengthen the competitiveness of our German plants.”

Schot will be replaced as chief executive by Markus Duesmann in April 2020. He is meant to make the carmaker more profitable, increase cooperation with VW and Porsche, and bring to market 30 electric vehicle models by 2025.

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