Audi, a prominent German automaker, is planning to downsize its workforce in the coming months by cutting thousands of jobs outside of production, with a focus on indirect roles within the company. According to reports from Reuters, the job cuts will primarily target areas like development, where over 2,000 positions could be affected. The goal is to reduce the workforce by approximately 15%, with around 4,500 indirect roles in Germany at risk.
This decision comes in the wake of Audi’s significant decline in profit during the third quarter, partly due to high costs associated with the impending closure of its Brussels plant. The company, a subsidiary of Volkswagen, is currently in negotiations with workers’ representatives regarding the potential job losses but has not disclosed specific numbers.
In the first nine months of 2024, Audi Group reported a 45.8% decrease in profit after tax, amounting to €2.42 billion, compared to €4.47 billion in the same period last year. Revenue also fell by 8.2% to €46.26 billion, reflecting various challenges such as a challenging macroeconomic environment, market difficulties, and expected restructuring costs.
In response to these challenges, Volkswagen CEO Oliver Blume announced a comprehensive cost-cutting program aimed at addressing long-standing structural issues within the company. The program may involve significant reductions, including factory closures and layoffs, to enhance competitiveness and ensure sustainability. Approximately €900 million has been allocated in the annual report for these initiatives.
Overall, Audi’s decision to streamline its workforce and Volkswagen’s cost-cutting measures signify a strategic shift towards greater efficiency and competitiveness in the automotive industry. The company’s restructuring efforts are crucial for adapting to evolving market conditions and securing long-term sustainability in a rapidly changing business landscape.
