Volkswagen's Overhaul

Dieselgate's Next Victims

  • Why it matters

    Why it matters

    Volkswagen needs to cut costs and boost sales to get out from under the losses stemming from the Dieselgate emissions scandal.

  • Facts

    Facts

    • VW plans to slash costs by €3.7 billion, or $3.9 billion, annually by 2020.
    • The cost-cutting program will result in 23,000 layoffs at VW plants in Germany and another 7,000 layoffs in North and South America.
    • The goal is to double profit margins to 4 percent at VW’s core brand by 2020 and then boost those margins to 6 percent afterward.
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    Audio

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VW's executive and supervisory board members announced the job cuts on Friday. Herbert Diess, second from left, and CEO Matthias Müller, middle, did not address Dieselgate during their presentations. Source: Philipp von Ditfurth / DPA

Faced with the biggest crisis in its history – Dieselgate – Volkswagen on Friday confirmed its most expansive reform program since its founding in 1937.

The automaker’s core brand plans to slash annual costs by €3.7 billion ($3.9 billion) by 2020 and lay off tens of thousands of workers, the chief executive of VW’s core brand, Herbert Diess, said Friday.

The cost cutting will result in 23,000 layoffs at VW plants in Germany and further cuts in the Americas, Mr. Diess said at a joint press conference with VW Group CEO Matthias Müller and works council chairman Bernd Osterloh, confirming a story in Handelsblatt.

The VW Group, which also makes Audi, Porsche, Skoda and other car brands, had 624,000 employees worldwide at the end of September. The VW core brand had 125,000 employees in Germany at the end of 2015. The non-executive supervisory board, which has to sign off on all major strategic decisions, will meet later Friday to discuss the savings plan.

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