Der neue Volkswagen e-Golf

In order to save an estimated 3.7 billion euros (RM17.4 billion), the Volkswagen Group has announced that it will cut 30,000 jobs from its workforce globally. Of that sum, 3.5 billion euros (RM16.4 billion) will be invested into the development of electric, connected and autonomous vehicles, in the hope that the latest efforts will turn the group around following the long-running Dieselgate saga, according to a Reuters report.

Of the 30,000 jobs to be cut from its core brand, 23,000 will be from Germany, though VW points out that none of these come through compulsory redundancies. Instead, it says that the “socially compatible loss of jobs” will take place via “natural fluctuation and partial early retirement.” On the flipside, 9,000 new jobs have been pledged in battery production and mobility services to cater to the new direction towards electrification.

“We have to invest billions of euros in new cars and services while new rivals will attack us; the transformation will surely be more radical than everything we have experienced to date,” said VW brand CEO Herbert Diess. The job cuts make up approximately 5% of VW’s 610,000 employee total, or 19% in Germany, where 120,000 work for the automaker.

The automaker aims to raise operating profit from 2% to 4%; other European carmakers Renault and Peugeot Citroen target an operating margin of 6% by 2021. VW’s electric cars will be built at its German factories in Zwickau and Wolfsburg, while electric motors will be made in Kassel and battery cell production/development will take place in Salzgitter. Meanwhile, battery packs for EVs and hybrids will be built in Braunschweig, VW said.