Volkswagen's tough choice: Significant savings program may lead to job reductions

Volkswagen is set to implement a savings program valued at $8 billion, a move which might prompt job cuts. Thomas Schaefer, head of the brand, expressed that the combination of soaring production costs and low productivity are rendering the VW brand non-competitive.

"Due to numerous lasting problems in our existing structures and processes, escalated costs, and low productivity levels, we are no longer as competitive as the Volkswagen brand should be," stated Thomas Schaefer, during a meeting with employees at the VW headquarters in Wolfsburg, Germany.

The brand is on track to roll out a savings program worth $8 billion, a component of which may be job cuts, as reported by Reuters. It was expressed earlier by VW that they hoped to negotiate agreements concerning partial or early retirement for some of its employees.

Volkswagen had previously proposed utilizing the "demographic curve" for job reduction, implying that there will be no layoffs until 2029, as recalled by Reuters.

Company executives stress that most of the targeted cost reduction amount of $8 billion should not be linked with job cuts.