Job cuts are coming thick and fast from Volkswagen AG. Just since December, it’s announced plans to reduce its German workforce by 35,000 over five years, to cull 1,900 positions at Porsche and 7,500 at Audi, and to shrink its software business by roughly a third.
But a closer look at how the company compares with some of its biggest competitors shows that even if the company follows through with all these moves, it will still employ far more people than its peers.
Volkswagen ended last year with 679,472 employees, the company disclosed in its annual report released last week. Although this was down about 0.7% from 2023, the total was still dwarfs the 384,338 people that Toyota Motor Corp. had on staff as of Dec. 31.
In its report, Volkswagen also disclosed that it ended the year with 293,338 people on staff just in Germany. That’s more than Stellantis NV, Europe’s second-biggest carmaker, employs worldwide.
The figures speak to why past Volkswagen leaders have described the company as a slow-moving tanker ship. Chief Executive Officer Oliver Blume has taken steps to change this, brokering an agreement with the manufacturer’s powerful works council late last year that is expected to eventually yield about €4 billion ($4.3 billion) in annual savings.
While this was a major step forward, Volkswagen still stopped short of more drastic measures that management had pushed for, including closures of multiple German plants.
Volkswagen and its compatriots are holding out hope that Germany’s landmark shift to greater government spending will revive Europe’s largest economy after two years of contraction. The loss of cheap Russian energy, muted domestic demand and waning exports spurred companies such as steelmaker Thyssenkrupp AG and the conglomerate Siemens AG to cut staff. A broader automotive downturn has pummeled suppliers including Schaeffler AG, Robert Bosch GmbH and Continental AG.
Pushing through job cuts at Volkswagen is difficult. Worker representatives occupy half the seats on the carmaker’s supervisory board, and the German state of Lower Saxony — which tends to side with unions — has another two seats.
Volkswagen still makes many of its components in-house — including electric motors, gearboxes and axles — and plans to ramp up output of EV batteries, all of which contributes to its bloated headcount. But executives have warned that flagging sales in Europe have left the company with about two car plants too many, and that VW needs to become leaner to compete with Tesla Inc. and new entrants from China.
Due to German labor laws, much of the personnel cuts that Volkswagen and its peers have planned will happen via attrition and retirements from positions that won’t be filled again.