We recently reported that Porsche AG will trim its workforce by 1 900 employees by the end of the decade in response to weak electric vehicle demand and “challenging geopolitical and economic conditions” – https://online.fliphtml5.com/fcuca/mafa/#p=60. The Volkswagen AG-controlled luxury brand plans to reduce headcount at two German sites through voluntary measure. Now further announcements have been made.
Volkswagen subsidiary Audi to cut 7 500 Jobs
Many Audi employees will soon be looking elsewhere for employment. Parent company Volkswagen has announced it will eliminate around 7 500 Audi positions in Germany before the end of the decade.
According to the automaker’s website, this move affects nearly 9% of Audi’s worldwide workforce. Officials say the job cuts will save the company more than $1 billion. At the same time Audi is planning to invest nearly $9 billion into German plants to increase manufacturing of electric vehicles.
The job cuts, along with other financial cuts, are expected to save Audi employees over one billion euros per year in the medium term, according to the statement about this decision. The company and the works council had long and intensively debated the savings plans and now appear to be in conceptual agreement. At one point, even significantly higher figures for job cuts were being discussed – around 12 000 jobs were said to be at risk. Audi, it is said, must become faster, more agile, and more efficient. This will inevitably have personnel consequences. However, there are to be no compulsory redundancies until 2033, which Audi CEO Gernot Döllner sees as good for the workforce. Previously, 2029 was considered the last year with job security.
Most of the Audi employees affected will leave by 2027
At the same time, Audi plans to invest eight billion euros in its German locations. For the challenging transition to electromobility, it is preparing Ingolstadt and Neckarsulm as robustly and flexibly as possible. According to Audi, the job cuts will be indirect. This means that production is unlikely to be affected much, but will involve a reduction in bureaucracy. However, the company doesn’t want to take a “mower-like: approach to the matter. Instead, it is focusing on consistently aligning its team structure with the requirements of the future. The first 6 000 positions are to be eliminated by 2027, followed by a further 1 500 by the end of 2029. How the cuts will be distributed among the Ingolstadt and Neckarsulm locations has yet to be determined.
Further financial cuts will affect Audi employees, as already indicated above. Among other things, profit-sharing is to be structurally restructured and further reduced for several years. These are significant sums. In 2024, the employee bonus paid out for 2023 amounted to a whopping €8 840 per employee. However, the bonus for 2024, which will be paid out this year, will not yet be affected by the now agreed reduction. However, it is likely to be lower due to the recent weaker business performance. In the first nine months of last year, Audi’s profits were almost halved. Audi was also plagued by a shortage of engine components, weakening business in China, and provisions for the closure of the Brussels plant. Exact figures will follow soon.
Siemens cutting 6 000 positions
Siemens AG is cutting roughly 6 000 positions company-wide, mainly in its Digital Industries business unit that develops and manufactures industrial automation hardware and software, and offers digitalisation technology and services. CEO Roland Busch anticipated 5 000 job cuts late last year when Siemens reported a -46% drop in revenue for that operating unit.
Now, Siemens has put the number of redundancies for Digital Industries at 5 600, or 8 per cent of the total employment for that segment.
The entire engineering group has 312 000 employees total across all of its business, but the industrial automation business has been hampered by prolonged weak demand, especially in Germany and China. “The German market in particular has been in decline for two years. Capacities in Germany must therefore be adjusted,” according to a group statement.
In contrast, Siemens recently documented two US expansions worth $5 million for its industrial automation business in the US.
“We believe in the innovation and strength of America’s industry. That’s why Siemens has invested over $90 billion in the country in the last 20 years. This year’s investment will bring this number to over $100 billion. We are bringing more jobs, more technology and a boost to America’s AI capabilities.”
Siemens also will cut 450 jobs from its electric vehicles charging business, or about one-third of the total employed in that unit. That business, Siemens eMobility develops and supplies EV charging infrastructure (AC and DC chargers), charging software, and services.
Earlier last fall, Siemens put forth a plan to combine the EV charging business with a DC charging business called Heliox, which it purchased in January 2024. Heliox is focused on producing chargers for electric commercial vehicles and buses.
