Volkswagen announces up to 7,000 job cuts

Volkswagen Golf 3

Volkswagen Golf 3

The carmaker's Audi and Porsche brands made up the lion's share of VW Group's operating profit.

"The current year will be a key year for the transformation of the brand", according to VW, which expects its new savings program to increase profits by 5.9 billion euros (6.6 billion US dollars) from 2023.

The plan, announced on Wednesday, comes a day after the German automaker warned it would cut jobs as it speeds up the rollout of electric cars, which are less complex to build and require fewer workers.

The automaker also aims to raise productivity and make 5.9 billion euros ($6.7 billion) worth of annual savings by 2023. VW has been pushing to rein in bloated expenses to lift profitability that's trailing rivals. Volkswagen's chief executive officer, Herbert Diess, explained during the recently held Capital Market's Day that building fully-cars as opposed to electric and combustion drivetrains is a much more efficient approach. Diess, who also heads up the VW brand, has been axing slow-selling models and auto variants to reduce complexity.

Back in 2016, VW had launched the last major savings program that will run until the end of next year.

The Volkswagen Group yesterday announced it now intends to build 22 million EVs across its brands by 2028, a huge 47 percent jump from its previous estimate of 15 million. "We are on track", Brandstaetter said. He stressed a job guarantee until at least 2025 remains in place with any reductions based on voluntary agreements and called for a labor pact to retrain staff. "We won't agree to positions being subcontracted", Osterloh told Bloomberg in an e-mail statement.

Volkswagen stuck to its outlook, reiterating that it expects revenues to grow up to 5%, and to deliver an operating return on sales at group level of between 6.5-7.5% in 2019. It will boost investment in future technology to €19bn through 2023, an increase of€8bn. The company confirmed that it will start taking European orders on its I.D. Hatchback model this coming May 08.

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