Wednesday 5 June 2019 8:55 am

Volkswagen to cut thousands of jobs in €4bn modernisation drive

Volkswagen will invest as much as €4bn (£3.6bn) until 2023 to digitalise its operations.

The automotive giant said this morning it could cut up to 4,000 jobs in non-production units in the process. But, it added, the move will also create “at least 2,000” jobs elsewhere. The job cuts will come in Germany.

Read more: Volkswagen puts away €1bn contingency fund for dieselgate damages

It said manual tasks will become more simple “through improved IT”.

The cuts will mainly centre around administrative roles, where digital processes are upending traditional roles across industries. It also said the modernisation would include a new “highly efficient purchasing system” and “new standard human resources applications”.

The news will concern those employed in procurement, HR and other administrative roles in the firm’s Wolfsburg base. But, it added, it will not make any compulsory lay-offs until 2029.

“A precondition for this is that tasks are eliminated as a result of digitalization,” it said.

Volkswagen chief operating officer Ralf Brandstätter said the move was part of “making the company fit for the digital era.

“If we have to eliminate jobs as a result of digitalization we are doing so along the demographic curve in the most socially responsible manner possible.”

Read more: Volkswagen to build Tesla-style gigafactories as it ramps up electric car production

Chief executive Herbert Diess warned in March that building zero-emission cars took “30 per cent less effort” than those with internal combustion engines.

Board member for HR Gunnar Kilian said the firm was “painting a picture of the future”. “[This] only shows us the quantitative side to our workforce requirements, but also identifies the skills we need to succeed in competition”.