On May 2nd, following in the footsteps of Tesla, another automaker facing layoffs is Volkswagen.
Recently, after announcing a significant drop in first-quarter profits, the Volkswagen Group revealed plans to improve its full-year performance in 2024 by reducing the size of its administrative staff in Germany. The group will offer a massive €900 million bonus to employees who choose to resign early.
Volkswagen Group's performance in the first quarter was lackluster, with sales revenue at €75 billion, lower than the €76.2 billion in the same period last year. Operating profit was €4.6 billion, a 20% decrease year-on-year, with an operating profit margin of 6.1%.
The decline in first-quarter performance at Volkswagen was attributed to "lower sales volume, an unfavorable product mix, and increased fixed costs." The group's CFO explained the necessity of streamlining the workforce during an investor conference call and stated that the goal would be achieved through offering resignation bonuses.
According to reports, Volkswagen plans to offer a €900 million bonus to administrative staff who choose to terminate their contracts early. Eligible senior administrative staff in Germany, in addition to regular severance pay, can also opt to receive an extra €50,000 bonus.
It is worth noting that Volkswagen Group's HR director had predicted the workforce reduction at the end of last year, stating that the group needed to reduce personnel costs by 20% to achieve its financial goals for 2024.
