The cuts will mostly happen “along the demographic curve” – through employee turnover or an early-retirement program.
Audi said that the layoffs would save the company $6.6 billion that it will use for “electrification” and “digitalization” in its future projects.
The luxury carmaker plans to create 2,000 new “expert position” for electric vehicles. It will prioritize filling these positions from within the company and look outward to fill any remaining roles.
Work Council Enforces Favorable Terms For Employees
As the Wall Street Journal noted, Germany’s laws require companies to fill half of the non-executive supervisory board with non-management level employees — giving them a better bargaining position when it comes to job cutting.
The terms that the Audi’s Work Council agreed to require Audi to guarantee that there would be no layoffs in the next ten years, i.e., until November 29, 2029.
Audi will also dedicate an additional $55 million starting 2021 to improve its pension plan.
Audi’s restructuring plans come at a time when it is struggling to turn profits amidst slowing global demand, as noted by the Wall Street Journal.
The automaker’s production fell 6% in the first three quarters this year compared to last year, with overall sales falling from $48.7 billion to $45.4 billion.
Audi traded 0.25% lower at $884.85 at Frankfurt Stock Exchange’s Xetra early morning on Wednesday. Its parent company Volkswagen traded 0.55% higher at $176.84.
Photo Credit: Marketing.fgg via Wikimedia
See more from Benzinga
- SoulCycle CEO Resigns In 'Mutual Agreement' With The Board
- Goldman Sachs Fined M By CFTC
- Asian Markets In Green As US China Trade Talks Make Progress
© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.