VW’s €3.7 Billion Savings Plan Will Cut 30,000 Jobs

Volkswagen AG has agreed with its workforce to eliminate 30,000 jobs over the next nine years as part of a €3.7 billion ($3.9 billion) cost-cutting plan.

VW, which has pledged to refrain from forced layoffs, pledges to achieve the 5% employment cut solely through attrition as older workers retire. The company says €3 billion of the savings will come from facilities within Germany. Much of the balance will occur at VW operations in Argentina and Brazil.

The cost-cutting crusade is being driven in part by the rising cost of VW’s multi-billion-euro diesel emission cheating scandal. But the plan predates that 15-month-old crisis. Its ultimate aim is to make VW—particularly those connected with the VW brand—more efficient. The program also aims to facilitate the company's shift from traditional carmaking to a future that includes electrification, connectivity, ride-share services and self-driving vehicles.

VW says today’s agreement will help it launch new models, upgrade facilities and prepare to meet a goal of selling as many as 3 million electric vehicles per year by 2025. The company says two of those models will be produced in Germany at factories in Wolfsburg and Zwickau.