Cash-Strapped Volkswagen Is Cutting 30,000 Jobs To Pay For Dieselgate

Industry News / 6 Comments

The brand is reducing its German workforce by 19%.

Dieselgate continues to have far-reaching effects on the Volkswagen Group. Lies were exposed. Heads rolled. More lies were exposed. You get the drift. The scandal killed off some really awesome enthusiast cars like the Golf R400. It also led to the death of the Volkswagen World Rally Championship team and Audi's Le Mans program. But those consequences pale in comparison to what The Guardian is reporting: VW is planning to cut 30,000 jobs around the world. The cuts will only affect those working for Volkswagen and not any of the Group's other marques.

Of the 30,000 workers who will lose jobs, 23,000 work in Germany. The other cuts will hit workers in Brazil and Argentina. Herbet Diess, head of Volkswagen, said the cuts are designed to make the automaker "leaner and more efficient." The money saved will be poured into research and development of electrified cars. Volskwagen's goal is to launch 30 electric-powered cars by 2025 and to achieve that goal it will need some serious cash on hand. Throughout act two of Dieselgate, aka the part where punishment was handed down, the Volkswagen Group has acted almost as if having to pay $15 billion in fines to the US government was no big deal.

At the times the automaker's tone seemed a bit arrogant, like when it insisted that no brands would need to be sold to help pay its massive fine. But now we know that was all just tough talk from those at the top of the tower. Volkswagen employs 600,000 people around the world, which means these cuts will trim its work force by 5%. That may not sound like a lot, but in Germany 120,000 people work for the automaker. Losing 23,000 workers equates to a 19% staff reduction (yay, math!). That's a lot of people to let go, and by extension to have to answer to, in your home country. But really, the automaker had not choice. VW just experienced its first financial loss in over 20 years, and that's set to tumble after fines and settlements have been paid.

Selling brands off would have brought in short-term cash but the Volkswagen's Group's automakers are profit drivers and need to be kept in the fold. For what it's worth, Volkswagen's head honcho seems to understand the gravity of the situation. "It's a major step forward and undoubtedly one of the biggest in the history of the company. I am very sorry for those affected, but the situation of the brand at the moment gives us little room for manoeuvre," Diess said. We'd love to know the criteria for the workers added to the chopping block, because we feel for them.

Join The Discussion


To Top