Thomas Schäfer, CEO of Volkswagen Passenger Cars, admitted at a recent staff meeting in the company HQ that brand had been struggling to stay competitive, Reuters reports. Another executive, Gunnar Kilian, went as far as to suggest ‘dropping’ some ‘ballast’ to break even, possibly referring to job cuts.
Schäfer first openly criticized the company’s internal processes this summer, calling them unnecessarily slow and rigid. He said that this lack of corporate flexibility was what precluded VW from staying on par with other brands. Compounded with the exorbitant expenses the company has been bearing lately, multiple executives have expressed concern over its continued financial stability.
In the summer, a short-term plan was announced to cut the costs by up to €10 billion using every means possible. Back then, the media had interpreted the news as an intention to invest less in developing new cars and trim down the existing product range, removing the least popular models from production.
However, it now looks like those measures may not be enough. According to Reuters, Volkswagen AG is seriously considering major staff cuts despite previous plans to avoid them until at least 2029.
Gunnar Kilian ventured an opinion that the company might benefit from sending some of the workers to an early retirement while reducing the workload for some others. It doesn’t look like a solid plan yet, but VW said it intended to finalize and adopt the cost-cutting strategy before the end of the year, complete with all the specific measures proposed.