German automaker Audi to cut 9,500 jobs by 2025

Daniel Fowler
November 28, 2019

The automaker guaranteed jobs for its remaining workers until 2029 - Audi said that it is "excluding terminations for operational reasons" until that date. Sales fell to EUR41.3 billion from EUR44.3 billion, while after-tax profit rose to EUR2.8 billion from EUR2.5 billion.

Like its parent Volkswagen (VOW.DE), and rival German carmakers BMW and Mercedes, Audi is under vast pressure to start mass producing electric vehicles - not only to compete in the new electric era, but also to avoid hefty fines under the EU's new Carbon dioxide emissions standards. The deception was uncovered by researchers, and in 2015 US authorities charged Volkswagen and Audi for committing fraud and violating USA environmental laws.

The affair tainted Audi's image and it lost ground to its main rivals, BMW AG and Daimler AG's Mercedes-Benz. He will take over a company still haunted by the tail end of the "dieselgate" emissions-cheating scandal, that claimed the scalp of former CEO Rupert Stadler. The cuts will hit the company's Ingolstadt and Neckarsulm workforces in Germany.

At the same time, the Volkswagen subsidiary said it would create 2,000 new jobs in the areas of electromobility and digitisation as it pivots to the smarter, cleaner cars of tomorrow.

Audi's chief executive, Bram Schot, said the cuts would make Audi more efficient.

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"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", Audi said in a statement. "An equivalent percentage staff reduction will take place in management".

"A long-term future perspective is guaranteed by the electric models to be built at both plants in the future", Audi said.

The details of the restructuring plan were thrashed out in months of negotiations with labor representatives.

In addition to guaranteeing that there would be no layoffs before 2029, Audi management also agreed to increase its contribution to the company's pension plan by EUR50 million a year beginning in 2021.

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