Carmaker Under Pressure: Volkswagen Announces Major Job Cuts

Written by Camilla Jessen

Jul.09 - 2024 1:17 PM CET

The German car manufacturer let go of more than 1,000 employees.

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Volkswagen AG has announced a significant reduction in its workforce.

Over 1,000 contracted employees will soon lose their jobs at Germany's largest car company. Volkswagen has decided to let the contracts of 1,000 to 1,200 temporary employees at its plant in Zwickau, Saxony, expire.

This decision is a major blow to the workforce, as decreasing demand for electric cars has led to these job cuts.

This development was reported by Merkur.

Germany's largest car company currently employs around 11,000 people at the Zwickau plant, with 2,700 holding fixed-term contracts.

By 2025, many of these temporary contracts in the electromobility sector will not be renewed, according to Merkur.

Blame on Policy Changes

Economist Ferdinand Dudenhöfer has criticized Federal Minister of Economics Robert Habeck for the situation.

In an interview with Bild, Dudenhöfer pointed to the abrupt end of the e-car bonus at the end of 2023, which has had a significant impact on the market.

While the Federal Motor Transport Authority reported an 11.4 percent increase in battery-powered electric car registrations last year, this growth was much lower than in the previous year.

Broader Economic Effects

Volkswagen is not the only German company feeling the strain of the green transformation and the uncertain political environment.

Other sectors are also experiencing declines in demand. Heating manufacturers like Viessmann and Stiebel Eltron have announced short-time work, and Vaillant is cutting 300 jobs.

Additionally, foreign investment in Germany is decreasing, further straining companies like the Chinese electric car manufacturer BYD, which plans to move production to countries with lower costs.