VW to Cut 7,000 Jobs in New Savings Drive

Volkswagen announced that it is planning to cut 5,000 to 7,000 jobs by 2023 to lower operating costs by $6.6 billion.Most of the job cuts are expected to be carried out through retirement offers. It is estimated that 11,000 Volkswagen employees will be eligible for retirement in 2019. As part of this announcement, VW is planning to boost their software engineering department significantly in the coming years, hiring 2,000 new employees in software and electronics. Currently, VW claims that 90% of their engineering is hardware-related, but it wants to shift this to around 50% by 2030.

Just yesterday they claimed they plan to offer 20 more electric models (for a total of 70) and sell 22 million electric vehicles over the next 10 years.  They’re certainly gearing up for some big expansion into a new section of the industry, which doesn’t seem to mesh well with significant layoffs.

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On 3/13/2019 at 11:57 AM, Brian W said:

Volkswagen announced that it is planning to cut 5,000 to 7,000 jobs by 2023 to lower operating costs by $6.6 billion.Most of the job cuts are expected to be carried out through retirement offers. It is estimated that 11,000 Volkswagen employees will be eligible for retirement in 2019. As part of this announcement, VW is planning to boost their software engineering department significantly in the coming years, hiring 2,000 new employees in software and electronics. Currently, VW claims that 90% of their engineering is hardware-related, but it wants to shift this to around 50% by 2030.

Just yesterday they claimed they plan to offer 20 more electric models (for a total of 70) and sell 22 million electric vehicles over the next 10 years.  They’re certainly gearing up for some big expansion into a new section of the industry, which doesn’t seem to mesh well with significant layoffs. 

EVs are less labor-intensive to manufacture.  There are two major reasons for this:
1)  EVs contain far fewer parts than ICEs
2)  Recent advances in sensors/computing have enabled greater automation of manufacturing processes.

At the same time, those advances in sensors/computing allow more of a car's functions to be performed with software, which decreases the need for hardware.  E.g. you don't need a hundred buttons, knobs, and switches when you have a center console.  In fact, you don't even need an oil dipstick; BMW checks the oil level electronically and reports the result to the driver.  This increased electrification of the vehicle means you need:
1)  Fewer hardware engineers
2)  Fewer suppliers
3)  Fewer manufacturing employees
4)  More Electrical Engineers and Computer Scientists.

In other words, the hiring of EE/CS professionals will somewhat mask the loss of manufacturing/hardware jobs. 

 

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