The German automaker Volkswagen's diesel emission cheating scandal in the US is a huge blow not only financially. Volkswagen is spending millions to pay for its fines and compensations to the affected owners. The automaker seems to lag even more behind its fierce rivals in the automotive industry. Now, the company attempts to bounce back and keep up by cutting 30,000 jobs as part of its massive shake-up.
Volkswagen's 30,000 Job Cuts And Massive Shake Up
Volkswagen has announced in a press conference that it will be undergoing a huge restructuring program, according to the Business Insider. The said program is called "The Pact for the Future" and it includes cutting 30,000 jobs in the coming years. Volkswagen Executives specifically mentioned that 23,000 of these job cuts will be in Germany.
Apparently, axing thousands of jobs is part of the company's goal to focus on increasing their productivity by 25 percent. This can only be achieved by having fewer people that will build more cars. Though Volkswagen assured that they will help those who will lose their jobs.
Volkswagen Goal To Be As Profitable And Competitive As Its Rivals
Volkswagen will now try to venture in building more electric cars. The automaker expects this move to make the company profitable and competitive. It seems that Volkswagen wants to keep up with its fierce rivals in the automotive industry like Toyota and General Motors. According to The Wall Street Journal, Volkswagen only has a 1.7 percent profit margin compared to Toyota's 7.9 percent and GM's 6.4 percent.
This goal is at the price of thousands of people who are going to lose their jobs. According to Engadget, they will be replaced by robots. It is uncertain how big the impact will be for them. It is yet to be seen if Volkswagen's venture into electric vehicles can make up for its diesel emission cheating scandal.