Volkswagen (VW) (OTCMKTS:VLKAY) have announced plans to cut around 30,000 jobs globally, in an attempt to cut costs and boost profit margins.
The company intends to implement the measures in order to ensure annual savings of €3.7 billion (£3.2 billion) by 2020.
VW employs 610,000 individuals across 31 countries. It is expected that the majority of cuts (23,000) will occur in the country’s founding nation, Germany, and are set to be completed by 2021.
Volkswagen chief executive, Matthias Mueller, said it marked “the biggest modernisation programme in the history of the group’s core brand”. The company, which is Europe’s largest car manufacturer, said it hopes the moves will increase operating margins by 2 percent.
“The VW brand needs a real shake-up and that is exactly what the future pact has turned out to be,” he added.
The car manufacturer has recently announced various initiatives to revitalise the brand, following a backlash from an emissions related scandal in the U.S. Last year it was exposed that VW’s diesel cars were fitted with software that recognised when cars were being monitored for emissions tests. It has been estimated that around 11 million cars globally are currently fitted with the software.
In response to the controversy, VW has agreed to pay a settlement of $15 billion, as negotiated with US authorities and the owners of approximately 500,000 vehicles.
Despite ongoing issues, the German car brand unveiled its first ever seven-seater set for US only release, earlier in November. The Atlas was envisaged by the company as a vehicle that will appeal to “the heart of the American market”.
The new SUV is to be the largest vehicle ever built by VW in the U.S, where it is constructed at its Chattanooga factory location in Tennessee. The car measures 5,037mm long and 1,979mm wide, making it VW’s largest retail passenger car on the market.