German luxury carmaker Audi has made a tough decision to cut down almost 10,000 jobs at its Germany based production plant. However, the company is planning to execute this decision within the course of five years. The decision was officially announced yesterday on the 27th of November 2019.
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However, Other Auto giants like Daimler seems to have also decided to cut down over 10% of its managerial roles to save €1.3bn (£1.11bn) of personal costs. Daimler has also warned its subsidiary Mercedes-Benz that the rollout of electrification could hamper its profits till 2021.
With this decision, Audi claims to free up almost €6 billion (£5.14bn) which is being considered to be invested in the company’s burgeoning electric vehicle (EV) product offensive and digital technologies.
Rumours also suggest that Audi has made this decision to sustain the amount being invested in developing two huge factories in Ingolstadt and Neckarsulm based in Germany with a combined annual capacity of 6,75,000 units, for Audi’s Electric vehicle initiative.
Higher-than-average personnel costs and substantial research and development investment by Audi is also being cited as one of the major reasons for the cutbacks.
Currently, The company employees around 62,000 workers in Germany alone and the proposed job cuts could mean that around 15% of its workforce will be chopped off by 2025. However, Audi will also extend its employment guarantee for its “core workforce” until 2029.
The Company in a press release stated “The company must become lean and fit for the future, which means that some job profiles will no longer be needed and new ones will be created. That is why Audi is investing systematically in future-oriented qualification measures for the employees and thus in the future of the two sites in Germany,”