Volkswagen Plans to Lay Off Workers Due to Uncompetitive Production

The Volkswagen passenger car brand is about to lay off its workers after CEO Thomas Schaffer cited that the brand is "no longer competitive."

Volkswagen Brand Faces Cost-Cutting

Although Volkswagen holds the highest volume among various brands owned by the Volkswagen Group, the brand remained less profitable when compared to Audi and Porsche. According to reports, the company is planning to enforce its $10.9 billion cost-cutting plan for the brand.

"With many of our pre-existing structures, processes, and high costs, we are no longer competitive as the Volkswagen brand," Schaffer stated during a staff meeting.

Moreover, it was reported that part of the production loss was due to the company's transition to electric powertrains from internal combustion engines. EVs have been surging for the past months but the production is significantly more costly than the ones with four-cylinder engines.

Volkswagen Experiences Issues With Vehicles

Aside from the transition, the company has been delaying new vehicles due to issues of malfunction. For instance, the company received a huge amount of negative feedback from the malfunctioned steering wheel which Schaffer promised to ditch.

Other concerns stemmed from the changes in the vehicles' designs that made them impossible to use at night or at dark passageways.

While there is still no final date as to when the company will start slashing jobs, there is still time for councils and organizations to re-negotiate the cost-cutting plan.

So far, the initial plan is to not fire anyone until 2029 and rely on looming retirements. In addition, the $10.9 billion budget cut could also come from savings instead of cutting jobs.