Volkswagen's 2024 Mass Layoff Plans: Production and Workforce Statistics

The German automotive company, Volkswagen Group, plans to lay off 15,000 employees.

According to Katadata, this layoff plan is reportedly linked to the potential closure of their factories in Germany. Bloomberg reports that this plan was revealed by American analyst Jefferies Group.

Jefferies stated that Volkswagen could close its factories without the supervisory board's approval. This closure could create a provision of US$4.4 billion or Rp67.32 trillion (at an exchange rate of Rp15,300) in the upcoming fourth quarter.

Jefferies mentioned that a management restructuring plan had been previously proposed but was blocked by the supervisory board.

“The labor union will feel pressured to reach a new agreement while Volkswagen forces layoffs,” said analysts at Jefferies Group, as quoted by Bloomberg on Tuesday (September 17, 2024).

The analysts also stated that workers could only react with strikes due to wage demands, despite the risk of disruptions at Volkswagen factories. These demands do not include plans for factory closures or layoffs.

Volkswagen is currently facing challenges related to high costs and increasing competition from Tesla and the Chinese car manufacturer, BYD Co. In early September 2024, Volkswagen revoked worker protections that had been in place for three decades in Germany.

This is a consequence of warnings about the potential closure of the Volkswagen factory in Wolfsburg, Germany, for the first time. This decision is feared to trigger conflict with labor representatives.

It is known that the supervisory board of the Volkswagen factory in Wolfsburg is composed of labor representatives. In addition, the state of Lower Saxony in Germany holds a 20% stake in the company, indicating its support for the labor union.

Currently, Volkswagen employs 682,800 people as of June 2024, according to the company's financial report. This number is down 0.2% from December 2023, when it was 684,000.

The company stated that 12,311 people are in the passive phase of partial retirement and 14,555 young workers are in vocational training.

Of this total, 294,705 work in Germany, down 1.3% from December 2023. Outside Germany, 388,066 people work for Volkswagen, an increase of 0.7%.

Meanwhile, car production reached 4.6 million units in the first half of 2024. This is down 1.8% year-on-year (YoY) from 4.69 million units in the same period last year.

Similarly, sales across all car segments reached 4.34 million units in the first half of 2024. The volume is down 2.4% (YoY) from 4.44 million units in the 2023 period.

Sales figures were: passenger cars EUR 104.62 billion; commercial vehicles EUR 22.73 billion; and power generation EUR 1.99 billion.